You can write or think whatever you like, Dairibord chief executive Anthony Mandiwanza somberly told assembled analysts and the media at the group’s presentation of its financial results for 2016 last Wednesday.
He had just announced a net loss of $5.4 million for the period, from a $2.3 million profit recorded in the preceding year, and an operating loss of $3.99 million from a $3.97 million operating profit previously and the stunned audience wanted answers.
“We know that our performance last year was very bad due to a number of issues and we know you have a negative impression about it, but we promise to improve this year going forward,” he added.
Zimbabwe’s largest milk processor, Dairibord reported a rather disappointing set of results for the full-year to December as the company failed to align production costs to the level of revenue generated citing a number of challenges — a decline in average prices, supply constraints and high production costs among others.
When an analyst suggested that in the current environment, the company should focus more on managing costs of the existing operations rather than continue with expansion initiatives which were not bearing economies of scale, Mandiwanza retorted that the company will not held back from expanding because the results were not immediate.
“We are not going to shrink ourselves to get outside of the pit but we do believe that we should grow out of it,” he said.
The group invested a total of $5.4 million in 2016.
It splashed on the UHT carton processing and filling plant to localize production of cartonised ultra-high temperature (UHT) milk which will result in import substitution and some savings.
Mandiwanza said the plant has capacity to process and pack cartonised juices.
It expanded the capacity of the Pfuko/Udiwo maheu plant to meet demand and increased the number of flavours.
Additionally, the company invested in peanut butter processing to enhance capacity and product quality.
This, according to Mandiwanza, means that the business has sufficient capacity to meet current and future demand.
Continued next page