Natfoods to sink US$ 30m towards capacity expansion

FOOD processing giant, National Foods Holdings Limited ( Natfoods), is continuing its drive to grow and broaden its product portfolio, with US$ 30 million worth of capacity expansion projects planned over a two-year period.

According to company secretary Leigh Howes, the group has a substantial pipeline of new projects, over the course of this and the next fi nancial year.

“These projects will see National Foods entering a number of new and exciting categories, whilst reducing imports of manufactured food products into the country.

“Our drive to grow and broaden the portfolio continues, and we look forward to bringing additional new and exciting products to the market in the near future as the various new plants are commissioned,” she said in a trading update for the third quarter to March 31, 2023.

Among the projects are the Harare breakfast cereal plant, which has now been commissioned and the fi rst products have already been released into the market.

According to the group, further additions will be made to the range of breakfast cereals over the coming periods.

Also on the list of investment projects is the installation of the new state- of- the- art fl our mill in Bulawayo, which is almost complete and expected to be commissioned next month.

Work on the new pasta and biscuit plants is underway at Stirling Road, Harare.

It is expected that these plants will be commissioned late in 2023, according to the group.

Meanwhile, from a trading perspective, the year- to- date period ( 9 months) has been a challenging one for the group.

Volumes for the year to date at 418 000 tonnes declined by 5 percent compared to last year, although after a very constrained fi rst quarter ( July to September), there has been something of a recovery in the last 2 quarters.

Natfoods has attributed the decline in volume to the flour unit, which saw an 18 percent output decline on the back of higher wheat prices globally, which in turn have led to increased bread prices compared to last year, impacting bread consumption.

Additionally, several new players have entered the fl our milling market, heightening competition in the category.

Volumes in the stock feeds unit have shown encouraging growth in the last two quarters after a diffi cult fi rst quarter driven largely by the key poultry category.

The maize category has also shown solid recovery over the last two quarters, which traditionally are the peak period for the business.

The group has launched a number of sorghum and millet- based products, providing consumers with a wider range of healthy starch options.

According to the group, the Downpacked unit continued to show steady volume improvements driven by value rice, which saw increased volumes on the back of its affordability, notably compared to bread.

The snacks unit produced solid volume growth for the period, mainly in the hard snacks category cereals unit witnessed a volume increase of 42 percent.

A new breakfast cereal range comprising flakes and instant cereals was launched in December 2022. To date, the products have been well received by the market, according to the group.