ZIMBABWE – Dairibord Holdings (DZL), Zimbabwe’s leading milk processor, has announced progress in its toll manufacturing project based in South Africa.

The initiative is part of the company’s strategy to elevate its foreign currency earnings through exports while mitigating challenges within the local market.

Toll manufacturing involves outsourcing production or part of it to a third-party company, with DZL providing raw materials or semi-finished products.

Mr. Josphat Sachikonye, the group chairman, highlighted the advancement of this project in the financial statement for the year ending December 31, 2023.

He emphasized the group’s readiness to capitalize on emerging opportunities while ensuring sustainable and responsible business operations.

“The organisation will continue to explore avenues for expansion, both domestically and regionally, while ensuring a sustainable and responsible approach to business operations,” he said.

Mr Sachikonye underscored the importance of raw milk supply growth and capital investment in driving the overall volume trajectory.

The group aims to expand plant capacities to optimize manufacturing capabilities while maintaining financial discipline. Investment in technology and innovation is also prioritized to enhance product offerings.

In April 2022, DZL recognized the demand for its products in South Africa, predominantly through informal supply channels.

To establish a sustainable presence, the company decided to reorganize its supply channels and extend its footprint into neighboring countries.

Presently, Dairibord’s brands are already present in markets such as Zambia, Mozambique, and Botswana.

Despite the aggressive pursuit of a lean and agile cost structure, Mr Sachikonye reiterated the group’s commitment to ensuring sustained profitability and long-term value creation.

The company’s revenue for the year surged by 47% to US$724.12 billion compared to the previous year, primarily driven by an 11% increase in sales volumes and strategic pricing adjustments.

Foreign currency revenue accounted for 84% of Dairibord’s total revenue, reflecting a notable shift from 58% in 2023.

This trend is expected to persist, given the prevailing economic conditions where over 80% of transactions are conducted in foreign currency.

Despite challenges posed by the ongoing El Niño phenomenon, DZL has implemented measures to mitigate its effects, including installing water reservoirs at operating plants and completing the Chipinge solar plant project to address electricity shortages.

According to the Dairy Services Unit of the Ministry of Agriculture, national milk production output increased by 8.78% to 99.8 million liters in 2023 compared to the preceding year. Processor intake also saw a significant rise, reaching 91.8 million liters from 82.5 million liters in 2022.

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