Posted on September 10, 2010 | Category: Politics; Business, Sport
Innscor Africa Limited says it will continue to invest aggressively in Irvine’s Zimbabwe Private Limited to boost day-old chick production and poultry processing, to buttress its growing fast foods division, but has no immediate plan to bulk up in its associate in the near term.
The diversified manufacturer, retailer and distributor of industrial foods acquired 49% of Irvine’s last year, bringing to five the number of core production units.
Core production subsidiaries under the group include National Foods, Colcom Limited and Innscor Appliance Manufacturing (Capri and WRS) and Niloticus, its Kariba-based crocodile ranching operation soon to be unbundled and listed separately.
“The company (Innscor) continues to invest aggressively into both day-old chick production as well as poultry processing, and as a result, further production increases will occur in both these parts of the operation in the second half of the new financial year,” Innscor said in an abridged financial statement for the half-year ended June 30.
During the review period, Irvine’s contributed strongly to group results, following a surge in chicken and egg production.
Chicken sales rose by 21% during the period from the second half of last year, while egg sales rose by 28% over the same period.
Irvine’s is Zimbabwe’s sole producer of the world’s leading broiler, the Cobb 500, which it breeds under franchise from United States-based Cobb Breeding Company.
Inaugurated in 1957 as a backyard project, the Harare-based company now owns the country’s largest poultry farm in Waterfalls where it has established a modern egg grading plant and chicken processing plant that produces up to 160 000 birds per week.
The infrastructure also includes a large feed mill with capacity to produce 900 tonnes of poultry feed per week.
In an exclusive interview early this year, Innscor CEO Tom Brown said the Zimbabwe Stock Exchange-listed company acquired Irvine’s late last year to strengthen internal synergies.
The acquisition, he said, was engendered to foster backward integration with Zimbabwe’s largest producer of chicken and eggs — key raw materials for its fast foods retail division, the group’s flagship, which it operates under a number of international franchises.
The counters include Chicken Inn, Pizza Inn, Nandos, Steers, Bakers Inn and Creamy Inn, most of which rely on imports of chicken and eggs from South Africa and Brazil for throughput.
“We have to increase the local production of broilers, eggs as well as day-old chicks to reduce imports,” Brown said then. “Imports currently make up the bulk of the supplies of chicken and eggs to our factories.
We want all key products to come from farms owned by the group. We’ve already done a lot of backward integration for National Foods and Colcom (Holdings).”
The acquisition has injected fresh capital for the expansion of Irvine’s production lines to feed a growing chain of fast food counters and Spar retail stores, which currently number 158 and 67, respectively.
Other operations under the group include TV Sales and Home, Spar Northern Region and Shearwater.
For the period under review, group revenue nearly doubled to $403,5 million from $254,8 million in the first half of last year, driven by retail silo comprising Innscor’s fast foods operations, the Spar corporate store retail operations and TV Sales and Home.
Profit before depreciation and amortisation interest amounted to $29,1 million from $13,8 million.
Fair value adjustments, interest and tax from continuing and discontinuing operations included, earnings were still strong at $20,7 million from $11,3 million.
The Innscor retail silo contributed $147,54 million to group turnover and $9,46 million to profit before tax.
The company’s fast moving consumer goods business accounted for $90,43 million of group revenue and %10,26 million to profit before tax.
The business comprises Irvine’s, Innscor Bread, Colcom, Innscor Snack Foods, Innscor Appliance Manufacturing and National Foods.
Distribution and wholesale operations contributed
$62,45 million to group revenue and $1,68 million to profits.
Revenue from its regional businesses in Malawi and Zambia also contributed significantly to overall group performance.
Revenue was $69,3 million, while profit before tax was
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