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Zimbabwe: Natfoods Diversifies to Survive Economic Turbulence
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Zimbabwe Independent (Harare)
25 July 2008
Posted to the web 25 July 2008
Jeslyn Dendere
ONCE regarded as the nation and region's most reliable source of food, National Foods Ltd, (Natfoods) has been reduced to a mere shadow of its former self.
The company has reduced operations and manufacturing of its wide range of products as the economic situation continues to bite.
A manufacturing sector survey report released this week revealed that Natfoods was not the only company that has been heavily affected by the country's economic challenges but a majority of manufacturing firms have crumbled under the hyper inflationary environment.
"Whereas 60% of the respondents reported capacity utilisation levels were below 35%, a significant 13% of the respondents reported that capacity utilisation was well below 15%, with some of these close to 0% capacity," Calisto Jokonya, the president of the Confederation of Zimbabwe Industries (CZI) said.
Natfoods used to own a wide range of products.
Its products included flour and maize mill, stock-feeds, polypropylene bags, edible oils and malt household pre-packs and general produce.
As the economy continues to decline, the company has been forced to drop some of its once famous products.
"We are the largest manufacturer of basic foods in Zimbabwe, raw materials permitting, from mealie meal under our Red Seal brand -- flour, edible oil, rice, salt, sugar beans, stock feeds and many others," Natfood managing director, Golden Chekenyere, told businessdigest.
According to Chekenyere, the company "like any other in the country" was facing difficulties in its major operations.
"We are open and operating in all units depending on raw material availability," Chekenyere said. "Our strategy is to produce at maximum levels whenever we have raw materials."
At the moment Natfoods has ceased most of its operations citing lack of raw materials and lack of funds to import.
"As you can see, most of our workers are milling around and basking in the sun. This is because there is not much to do besides repackaging of imports that belong to the Reserve Bank of Zimbabwe," Chekenyere said.
Chekenyere said capacities varied depending on availability of raw materials, from as little as 6%, up to 10%, others reaching up to 60%.
Though Chekenyere said NatFoods is manufacturing and distributing products at all times, he highlighted that it has been long since their products were last seen on the shelves.
Natfoods have devised other survival strategies, given that the company was no longer generating enough to cater for their workers. The central bank has engaged the services of Natfoods to repackage mealie meal and flour that it imports from South Africa for the People's Shops.
"National Foods holds product for third parties, owned by third parties, obviously and those products are not ours," said Chekenyere.
"We also offer pack down services whereby we pack down bulk products into smaller packs. For example we have been requested to repackage bulk Roller Meal and bulk Flour into smaller units."
Natfoods, according to Chekenyere also provides warehousing facilities upon request as they own large warehouses countrywide.
"In cases where approvals have been obtained from the authorities, we toll manufactured products for various organisations that have their own raw materials."
Despite Natfoods being a beneficiary of the BACOSSI funds availed by the central bank, the group has struggled even though they have tried to account for the funds.
"With BACOSSI Funds we have produced and supported the formal market and we also provide transport and distribution facilities, and packaging services to the government and many other customers," Chekenyere said. "For example, we received BACOSSI support for our Packaging Division and produced bags for Operation Maguta and other customers like Windmill (and) Seed co."
Natfoods has hinted on venturing into contract farming in order to alleviate challenges associated with shortages of raw materials for production. Crops that the company is looking at in the programme include maize, wheat, sugar beans, and oats among other crops.
As an agro based company Natfoods sees it self as an integral part of the national efforts to increase agricultural output and seeing to it that there is a fair and equitable distribution of basic foods to the formal channels throughout the country while at the same time maintaining a fair and realistic pricing of basic foods.
"We as a company have and continue to comply with government directives on pricing and prices," Chekenyere said.
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"Approval was sought and obtained from the authorities to sell rice and salt in our bonded warehouses in foreign currency under stringent conditions. The Authority is only temporary and it is not a permanent arrangement."
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| Copyright © 2008 Zimbabwe Independent. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here. | |||||||||||||||||||||||||||||
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