Tiger Brands boosts Zimbabwe unit

Tiger Brands last year raised its stake in National Foods after buying a further 11% of the company for $11.7m. It now owns 37% of the company while the majority of the remaining interest is held by Innscor Africa, which has interests in fast foods, retail and distribution sectors.

However, National Foods, a maize and flour milling, stock feeds processing and fast moving consumer goods company, is battling against imported processed foods. Its fast moving consumer goods unit's products, which include packaged rice, pastas, and tinned beans are struggling to beat foreign products.

Group chairman Todd Moyo said yesterday a turnaround strategy had been put in place to revive the ailing fast moving consumer goods unit. This includes "streamlining distribution costs, reducing the interest burden and developing category plans". It is expected that these moves will significantly raise volumes.

National Foods has pinned its hopes of further growth from continuing operations on likely demand for maize meal and flour owing to a possible shortage of food supplies both domestically and in the Southern African region.

However, with Zimbabwe's agricultural season in limbo - it is projected to record negative growth this year - the company could well be forced to rely on imports for its raw materials.

"The possible grain shortages reinforce the need for our local agriculture to be more productive so that we are not dependent on other countries for agricultural raw materials and related finished goods," said Moyo.

David Morgan, chairman of Innscor Africa - the other major shareholder in National Foods - said yesterday the company's results for the period under review were "pleasing".

Morgan attributed the results to "increased capacity utilisation" after the investment by Tiger Brands, and further investment "into core plant and equipment".

Source: Business Day