Improved raw materials supply relieve CFI Holdings

Audrey Galawu

CFI Holdings’ Agrifoods Division reported an increase in sales volumes despite the difficult operating environment.

The increase has been attributed to improved product availability resulting from strategic agreements with suppliers of key raw materials.

In its trading update for the first quarter ended December 31, 2023, CFI revealed that sales volumes increased from 9 832 tonnes, 18% above 8 313 tonnes sold in the previous year.

During the period, sales volumes for the Retail division’s key revenue drivers increased by 16% to 21 453 tonnes from 18 446 tonnes sold in the comparative prior year period.

The company also witnessed improved fertiliser sales following the reduction in prices to normal levels following the price spike in prior year as a result of global supply chain disruptions emanating from the Russian-Ukrainian conflict.

Overall, the group’s inflation-adjusted revenues for the quarter, at ZWL$159.8 billion were 544% higher than ZWL$24.8 billion the comparative prior year period.

Victoria Foods’ division wheat flour sales volumes at 3 916 tonnes remained almost stagnant against prior year level, registering a 3% growth from 3802 tonnes and this was attributable to stable wheat supplies during the quarter.

However, significant growth was curtailed by intermittent power outages.

“The operating environment remained challenging, characterised by the continued depreciation of the ZWL against the United States Dollar and inflationary pressures.

“This was aggravated by the delayed onset of the rainy season and prolonged dry spells, typical of the predicted El Nino phenomenon. This had the effect of dampening most farming-related economic activities.

“Glenara Estates potato harvest doubled to 2 989 tonnes from 1 468 tonnes for the prior period on the back of improved seed supplies. However, average selling prices achieved for the crop dropped by 8% from the prior quarter mainly due to a glut in supply of the crop on the market.

“The Estate's cattle breeding and pen fattening activities continued during the period under Joint Operations with reasonable success,” reads the report.

Maize meal volumes on the other hand grew by 10% from 1 497 tonnes to 1 647 tonnes due to improved raw materials supplies.