Regional seed producer Seed Co International Limited (SCIL) says the group will leverage its production capacity in the southern Africa region to offset supply challenges in east and west African regions.
While the two regions are experiencing seed shortages, output from operations in southern Africa will be enough to meet the shortfall.
“In spite of climate change and global inflation induced challenges encountered by seed growers, overall the group has adequate stocks to satisfy demand in most markets save for Kenya and Nigeria,” said company secretary Eric Kalaote.
“The group . . . is leveraging its production bases in Southern Africa, Zambia and Malawi as well as Zimbabwe, to supply seed to the East and West African markets that have shortages.”
In Kenya, drought as well as product unavailability resulted in volume declining by 46 percent during the half year to September 30, 2022 while shortages in Nigeria reduced volumes by 40 percent.
Overall, group volume dropped by 34 percent and this was partially offset by the appreciation of the Zambian kwacha curtailing the decline in turnover to 28 percent. Consequently, margins were also weighed down by the drop in turnover.
Revenue went down to US$25,5 million compared to US$35,5 million.
The group recorded a loss after tax of US$4,3 million from a profit position of US$1,5 million.
“Performance reverted to the usual first half cost accumulation and loss out-turn in line with the seasonality of the business. Unlike prior year, sales volume was subdued in the absence of early seed distribution mainly in Malawi as the Government delayed pronouncing its input programme for the 2022/23 season causing the SBU’s half-year volume to decline by 80 percent.
“A similar situation also obtained in Zambia with the Government delaying the intake of seed to the next half of the year unlike last year and reduced the SBUs’ volume by 20 percent,” said Mr Kalaote.
Despite the challenges experienced during the half year, SCIL is however upbeat of good full year — performance as rain forecasts are indicating normal to above normal rains in most parts of southern Africa.
This is also supported by the region’s focus on food security, which should see improved agriculture activity.
Mr Kalaote said: “On the back of enhanced focus on food security and the strength of the geographical spread that will mitigate mixed rainfall forecasts, the group is optimistic of better performance.
“Improved performance is expected from the South African associate that is now on a firm footing following its recent establishment.”
“We are however cognisant of the global risks, and we continue to implement mitigating measures to continue growing stakeholder value.” – The Herald
