Business / Companies
National Foods leveraging on the economy's recovery
29 Sep 2011 at 13:06hrs | Views
Depressed cereal production in the country has resulted in local manufacturers importing their raw materials, at landed prices which at some instances have caused the finished goods to be priced higher than the imported competitor products. This has also resulted in local manufacturers seeing their margins squeezed as they try to defend their market share.
National Foods was also affected but is now strategising for the future, through several initiatives, which have already started bearing fruit as shown by the increasing profitability.
The company sees effective production as key. Management is leaving no stone unturned to ensure efficiency in its processes. For financial year 2011, $2.2 million was expended as capex (inclusive of $636,000 used for the purchase of the rice packaging plant in Mutare). The budgeted capital expenditure for FY 2012 is $4.1 million, of which $1 million is targeted for the flour milling unit, $300,000 for the stock feeds unit and $800,000 for the Maize milling unit.
Group leveraging on its vast distribution network.
The growing number of depots and warehousing points should enable the company to capitalise on the growing market, especially in the rural communities which still remain largely untapped. Currently the group has 22 depots up from 10 in 2009. An effective IT System should enable centralisation of information, thus creating room for extension of credit to customers.
National Foods was also affected but is now strategising for the future, through several initiatives, which have already started bearing fruit as shown by the increasing profitability.
The company sees effective production as key. Management is leaving no stone unturned to ensure efficiency in its processes. For financial year 2011, $2.2 million was expended as capex (inclusive of $636,000 used for the purchase of the rice packaging plant in Mutare). The budgeted capital expenditure for FY 2012 is $4.1 million, of which $1 million is targeted for the flour milling unit, $300,000 for the stock feeds unit and $800,000 for the Maize milling unit.
Group leveraging on its vast distribution network.
The growing number of depots and warehousing points should enable the company to capitalise on the growing market, especially in the rural communities which still remain largely untapped. Currently the group has 22 depots up from 10 in 2009. An effective IT System should enable centralisation of information, thus creating room for extension of credit to customers.
Source - Imara Stockbrokers
