AGRICULTURE-BASED industrial holding firm, CFI Holdings Limited (CFI), is seeking strategic ideas to procure raw materials to sustain operations and curb losses emanating from the effects of El Niño.
The 2023/24 agricultural season is experiencing an El Niño drought characterised by erratic to below average rainfall.
“Management is tasked with employing strategic raw material procurement strategies to sustain operations, while also diversifying its retail lines away from dependence on agro inputs. Overall, the group anticipates the FY2024 economic outturn to remain challenging, and ongoing cost containment measures will continue to be implemented,” CFI said, in its trading update for its first quarter ended December 31, 2023.
The company said it would also diversify its retail lines away from dependence on agro inputs.
CFI said the continued depreciation of the Zimdollar against the United States dollar was worsening the situation.
In the quarter under review, CFI reported that its 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.
“Improved fertiliser sales followed 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 Russia-Ukraine conflict,” CFI said.
“Agrifoods’ sales volumes for the quarter at 9 832 tonnes were 18% above 8 313 tonnes sold in prior year. The significant achievement in a difficult operating environment was due to improved product availability resulting from strategic agreements with suppliers of key raw materials.”
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CFI said the Victoria Foods’ wheat flour sales volumes were 3 916 tonnes, a 3% increase from the comparative prior year period.
“This was attributable to stable wheat supplies during the quarter. However, significant growth was curtailed by intermittent power outages. Maize meal volumes on the other hand, grew by 10% from 1 497 tonnes to 1 647 tonnes due to improved raw materials supplies,” CFI said.
The group’s Glenara Estates potato harvest doubled to 2 989 tonnes, from 1 468 tonnes for the prior period, on the back of improved seed supplies despite average selling prices falling by 8%.
CFI said the group’s inflation-adjusted revenues for the quarter were 544% higher at ZWL$159,8 billion compared to the comparative prior year period.
“Overall, the group anticipates the FY2024 economic outturn to remain challenging, and ongoing cost containment measures will continue to be implemented,” CFI said.
