Milk supplies down 27%, profit up 612%


Milk supplies to Dairibord Zimbabwe were down by 27 percent during the first half of this year but net profit shot up by 612 percent from $445 million to $3.2 billion. According to the company’s results for the six months to June, the drop in milk supplies was largely due to the current agrarian reform programme.

The company, which owns Dairibord Malawi, Lyons and 40 percent of Charhons, saw its sales increase by 298 percent from $5.7 billion to $22.6 billion, despite price controls as well as shortages of foreign currency, fuel and spares.

It says business days were lost during stay-aways while disposable incomes were greatly eroded. Its diversification into non-milk based products helped to make up for the decline in supply of raw milk which was not enough to meet both domestic and export demand.

Despite all these setbacks, the company strengthened its distribution infrastructure, its information systems and invested in some factory machinery. It also commissioned a project that will provide strategic information on raw milk production as well as support services for its suppliers. It says its focus will be on continuing to revitalise raw milk supplies and growing non-milk products.

This should not be a problem because the company was sitting on a lot of cash, $3.4 billion at the end of June. And it had every reason to be optimistic because it believed the environment was about to change because of the “positive overtures in the political sphere”.


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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.


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