Zimbabwe: Natfoods to Deploy U.S.$12 Million in Capital Expenditure

Diversified conglomerate, National Foods Limited will deploy about $12 million in capital expenditure this year with about half of that going towards the flour business.

This year’s investment marks the final leg of a three-year programme to upgrade the company’s flour mills.

Also, NatFoods will grow its portfolio, investing into new categories and looking into further investment in biscuits and other categories.

“So the majority of that capex — about $5 million — is in the flour business. The rest is a spread between our remaining businesses,” NatFoods chief executive officer Mike Lashbrook said.

“Basically what we have done since dollarisation is steadily upgrade our plants to a point where they are anything you will see in the region,” he added.

By the end of the year NatFoods will have invested about $40 million since dollarisation.

Recently NatFoods purchased Iris Biscuit Company and moved into snacks.

“We are looking at growing and are very optimistic on Zimbabwe. We will invest for the future. We do not want to just continue where we are but we want to grow this company. We want to go into new categories and developments and we are looking into cereals at the moment. We are still engaging with our board but we are hoping that next year we will be able to get into the cereal game,” he said.

NatFoods also recently bought 40 percent stake of Pure Oil industries, the producer of ZimGold brand.

NatFoods, a Zimbabwe Stock Exchange listed concern and one of the largest manufacturers and marketers of food products in Zimbabwe, is also eyeing opportunities in the region.

“We have set ourselves that within a couple of years we would like to be in the region. We are starting to have a look over our borders and within the region for opportunities,” said Mr Lashbrook.

But Mr Lashbrook said competing in the region could be a challenge because the company imports most of its raw materials.

“Unfortunately because most of our raw materials are imported it makes it very difficult to compete in neighbouring countries where they produce their own raw materials.

“So it also highlights for us as a country why we have got to get our own productive base up such that we can get back to the point where we can be competitive regionally as well,” said Mr Lashbrook.

Currently capacity utilisation for the flour business is at 100 percent up from 91 percent last year. NatFoods produces around 180 000 tonnes of flour a year.

However maize capacity utilisation is down to 22 percent from 34 percent prior year.

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