Dairibord’s diversification pays off

Dairibord Zimbabwe’s diversification is now paying off. Non-milk-based products contributed almost 60 percent of the company’s operating profit during the year ended December.

Subsidiaries and associate companies contributed 54 percent of operating profit while the new transport subsidiary contributed 3 percent after only operating for three months.

According to the company’s latest results, sales increased from $18.8 billion to $101.4 billion. This was an increase of 439 percent against average inflation of 385 percent.

Milk supplies declined by 31 percent compared to 2002 and were adversely affected by the current land reform programme which resulted in some farmers stopping production while others were forced to reduce production because of problems in the supply of stockfeeds.

The producer price of milk shot up from $90 per litre at the beginning of the year to $1 350 by the end of the year.

Operating profit increased from $2.7 billion to $18.6 billion with net profit at $17.6 billion, up from $2.1 billion.

The company’s subsidiaries are Lyons and Dairibord Malawi.

It has a 40 percent stake in Charhons and has established a wholly owned transport subsidiary, Cluxmac. It started operating in October primarily to provide distribution services to the DZL group.

(178 VIEWS)