Innscor records growth across key segments
LISTED conglomerate, Innscor Africa Limited, maintained a positive volume performance for the first quarter to September 30, 2021 on the back of growth recorded across all key segments.
The strong volumes outturn was supported by the diversified group’s investments and business optimisation initiatives, despite a volatile economic environment characterized by inflationary pressures.
The latter part of the quarter however saw an improved trading environment on the back of the gradual removal of Covid-19 lockdown restrictions, which was an added advantage to the group’s operations.
“Following a period of relative stability, the trading environment during the quarter under review was characterised by increased levels of inflation and uncertainty.
“Notwithstanding current market dynamics, the group continued to deliver positive volume growth across most categories, supported by recent investment and business optimisation initiatives,” said the group in a trading update for the quarter.
At National Foods, overall volumes came in 24 percent ahead of the comparative quarter following an encouraging recovery within the maize division, whilst recent investment into broadening the product offering and plant enhancements delivered incremental growth for the business.
The maize division registered a 25 percent volume increase against the comparative quarter indicative of the adverse impact that imported maize meal had on the business during the comparative period.
Flour volumes rose 5 percent ahead of the comparative quarter, and consumer demand remained firm within the pre-pack and bulk categories while stockfeed volumes increased 29 percent over the comparative quarter.
This came against the background that small-scale poultry production and the general recovery across the protein market continued to strengthen demand.
Innscor said the bakery division closed the quarter 32 percent ahead of the comparable period while Colcom division, comprising Triple C Pigs and Colcom Foods, registered a 25 percent overall volume increase over the comparative quarter, with the processed category in particular, registering a growth of 44 percent.
“Pig production efficiencies and performance continue to improve, and are being supported by investment into additional capacity and enhanced genetics,” said Innscor.
At Irvine’s, volumes in the day-old-chicks category closed 39 percent ahead of the comparative quarter, driven by firm demand in the small-scale sector, whilst frozen poultry registered volume growth of 8 percent over the same period. Table egg volumes remained largely flat.
Volumes at Natpak, Prodairy and Probottlers rose 13 percent, 46 percent and 46 percent, respectively, on the back of increased investments into the segments, resulting in improved capacity.
On the downside, volumes at Associated Meat Packers were marginally lower than the comparative quarter primarily due to the restricted trading hours during the quarter due to the Covid-19 lockdown measures.
In terms of performance of associates, Profeeds’ volumes closed 17 percent ahead of the comparative quarter, as day-old-chick output grew 27 percent while Probrands’ volumes came in 80 percent better than the comparative quarter, primarily driven by the down-packed categories.
Despite current uncertainties in the market, compounded by Covid 19 pandemic, the group remains upbeat and will continue to focus on its ongoing business optimisation and expansion initiatives.
A conducive policy environment that supports ease of doing business will also work to local industry’s advantage going forward while good agriculture production will reduce importation of raw materials for manufacturing.
“We remain hopeful that practical, progressive and consistent policies will be adopted to ensure that the recent economic gains made by the country can be sustained into the future, and that current market complexities will be eliminated by the implementation of clear, and non-conflicting, laws and regulations.
“The continuing agricultural recovery is pleasing to see, with the 2021 maize harvest being excellent and a promising wheat harvest currently underway.
The improved agricultural output will reduce the dependency on imported raw materials, whilst also reducing the burden on the fiscus and improving household incomes,” said Innscor.
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