The company, which has operations in Zambia, Nigeria and Ghana, saw a 32% increase in revenues in the year ended 30 September 2012, with gross profit up 43% to ZMK480bn. Growth was seen across the group, with a particularly strong performance in West Africa, where revenues jumped by 65% over the year.
Zambeef recently completed a large capital investment programme, which included an expansion of its pork processing facilities, the development of new poultry housing and a doubling of capacity at its soy crushing plant. It said strong demand in the region meant it was confident it would see returns on this investment in 2013.
Zambeef chairman Dr Jacob Mwanza said: “Zambeef has continued to benefit from the growing Zambian economy which is driving buoyant demand for our products and services. This period has been one of unprecedented capital investment, aimed at expanding capacity to meet demand. Having now completed the large capital investment, we expect these efforts to be rewarded, both in terms of profitability and cash generation over the coming 12 months.”
Strong meat performance
Revenue from the company’s beef division was up 9%, with strong prices driving profits up 33%. Zambeef chief executive Francis Grogan said that the growth in beef turnover was largely driven by price. “Demand for beef continued to remain very strong throughout the year – for both choice feedlot beef and traditional beef – and far exceeded supply,” he explained.
In order to address this imbalance, Zambeef has introduced a minimum guaranteed price for traditional cattle to encourage year-round supply and initiated education programmes to improve the quality of cattle from small-scale farmers. “It is hoped that the programme will also have the effect of rejuvenating the small-scale beef sector, which has been declining for many years,” said Grogan.
Turnover in the chicken division also grew, with revenue up 6% and gross profit up 24%. “Turnover in the chicken division grew due to increases in both prices and volumes,” said Grogan. “The demand for chicken has been very similar to that of beef and, again, has outstripped supply for most of the year.”
Zambeef built and stocked 20 extra broiler houses to meet this demand and Grogan said that supply was now meeting demand on both whole birds and portions.
Pork revenues grew 30%, with profits up 23% on last year. As with beef and chicken, demand outstripped supply for most of the year, a situation compounded when the company’s Livingston abattoir was closed for three months due to a foot-and-mouth disease outbreak in the province.
However, Grogan said the company had addressed the imbalance by increasing prices to suppliers, guaranteeing a minimum floor price for small-scale producers, building a new pig abattoir in Chingola and commissioning a state-of-the-art automated processing plant.
“This strategy of guaranteeing a market and a minimum price has proved to be very popular, with supply now beginning to keep pace with the ever-increasing demand, which management hopes will continue into the future,” he added.