Droughts are good for milling companies. Despite rising inflation, cash shortages, shortage of maize and wheat, National Foods managed to increase sales from $28.3 billion in 2002 to $174.5 billion last year. Net profit shot up from $3.4 billion to $37.8 billion.
And though it got off to a bad start this year with most of its customers reporting poor Christmas sales, it says there are positive indications that this is a short-term position. Sales will pick up.
The flour division contributed significantly to the company’s results largely due to imports.
Maize input improved towards the end of the year but mill capacity utilisation remained below desirable levels.
The relaxation of price controls helped improve the availability of cooking oil.
Rice sales were buoyant due to the shortage of other starch products.
The lifting of the price control on salt making it a price monitored item helped improve volumes.
Sales of stockfeeds continued to deteriorate as the commercial beef and dairy herds continued to decline. But there was considerable growth in poultry feed as poultry became a more affordable source of protein.
The packaging division also did well despite the adverse conditions that affected most of the company’s customers.
The company ploughed $220 million to feed 47 000 children as part of its social responsibility programme.