Farm & City seeks $2m working capital
OLD time farmers in Zimbabwe have one or two experiences to share concerning Farm & City, one of the country’s major agricultural and hardware retail companies.
That experience or testimonial will most likely touch on the seemingly two different Farm & City companies, one being the old organisation which dominated the agricultural chain versus a current under-capitalised and not so prominent Farm & City.
A wholly owned subsidiary of CFI Holdings, Farm & City was once the farmer’s first and last point of reference.
Born out the Farmers Co-op and carrying the wealth of experience amassed since 1908, Farm & City has seen better days.
To reclaim that lost glory, Farm & City is currently undergoing a major re-organisation process which includes increasing branch network, availing working capital from disposal of group assets excesses to requirements and re-engaging current and new suppliers for a consistent supply of products.
Currently, the company is battling a working capital gap of about $2 million but overall the company needs about $5 million worth of stock.
CFI acting chief executive officer Timothy Nyika said the re-organisation is a “tough journey but achievable”.
Mr Nyika said the company has been operating at very thin working capital levels and as a result the shops were not stocked enough to attract meaningful business.
“As you are aware the Group has been in need of capital for a while and Farm & City is no exception.
“Opening of new outlets is driven by the opportunities as they arise from time to time focusing on high growth areas which are predominantly the farming regions. So far, five new shops have been opened and three were relocated to better sites,” said Mr Nyika.
The re-organisation, within Farm & City, which began last year, also entails negotiation better trading terms with key suppliers with a view to achieve sustainable margins for the company, increasing branch network for a wider and effective coverage of our market and rationalising the cost of doing business to improve profitability per outlet.
“This is an ongoing process as the company continues to look for opportunities to enhance its business.
“On our part, the task is to ensure we pay the commitments as they fall due to enhance supplier confidence on the company. Models keep evolving to ensure we are ahead of market expectations. The company has been opening new outlets which have been branded to give more visibility than the traditional old Farm & City stores,” said Mr Nyika.
Mr Nyika said the Company is operating from 40 outlets and planning to reach 50 outlets in the near future while revenue is expected to grow in line with the increased branch network and activity.
Director Hamish Rudland recently said some of the branches are worn down but the infrastructure was there, solid and well built.
The shops need a redesign and this will be in the concept store. He said Farm & City has huge potential especially if Agrifoods, another group company, comes on line, because it is a huge outlet for stock-feed.
“We are looking at a diversified agricultural hardware outfit that can offer the customers good service, good diversity of products and a one stop shop for that, where they can get their veterinary, general hardware and their farming inputs. And we hope in future where they can sell their farming products,” Mr Rudland said.
Opening of new stores, the refurbishments and the general re-organisation of Farm & City is all being financed from internally generated resources, from a rights issue to raise $12 million.
Farm & City Centre works closely with farmers’ unions as well as non-governmental organisations in grain input schemes in partnership with agro-dealers for marginalised rural communities.
Product range includes, agro-inputs and implements, post-harvest grain storage units, building materials, crop and general chemicals, stock feeds, veterinary, general hardware and general tools.