Dairibord Zimbabwe still managed to increase its sales by 171 percent despite a drop in milk supplies of 13.25 percent and price controls that affected most of its products.
The company says in its report for the year ending December it introduced a number of initiatives to minimise the decline of raw milk supply.
These included a producer finance scheme, lobbying the government to protect farms affected by the agrarian reform, mobilisation of smallholder farmers and the consolidation of the Milk Supply Development Unit.
Producer prices were also reviewed regularly and rose by 210 percent last year. The company says though the price controls eroded its margins, its performance was driven by the positive contribution of Lyons.
Though it is likely to continue facing difficulties this year, the company says it has established a Special Purpose Vehicle aimed at boosting milk supply. The vehicle is backed by a $2 billion finance scheme which should benefit both current and new producers.
It says the acquisition of a 40 percent stake in Charhons, which produces and markets confectionary products will reinforce its diversification.
It is anticipated that Charhons will contributed 20 percent of Dairibord’s attributable earnings, increasing the total contributions from subsidiaries and associates to about 45 percent. Last year it made a net profit of $2.1 billion, up from $611.6 million the previous year.
Sales had increased from $6.9 billion to $18.8 billion.