Dairyboard Zimbabwe Limited (DZL), the leading dairy processing company in Zimbabwe, has demonstrated remarkable performance in a challenging economic environment. The company reported a significant increase in the utilisation of raw milk, reaching a total of 28.5 million litres in just one year. Furthermore, Dairyboard recorded a 40% increase in revenue, reaching an inflation-adjusted figure of $63.38 billion for the financial year ending December 31, 2022.
Raw Milk Utilisation and Growth Initiatives
DZL Chairman, Josphat Sachikonye, highlighted the impressive growth in raw milk uptake, which accounted for 34% of the total intake by processors. The utilised raw milk of 28.5 million litres represented a 4% increase from the previous year, positioning Dairyboard as the leading milk processor in Zimbabwe. The company aims to continue expanding the volume of high-quality raw milk through its Milk Supply Development Unit (MSDU). The MSDU provides crucial support to farmers, encompassing areas such as feed formulation, veterinary support, herd growth projects, input procurement facilities, sustainability, and alternative energy options.
Resilience Amidst Challenges
Despite the prevailing economic challenges, Dairyboard’s performance has remained resilient. The company has successfully navigated issues related to erratic water and electricity supply, which have had a significant impact on production costs. These challenges, including the high cost of quality water and electricity, have not hindered Dairyboard’s ability to utilise raw milk effectively and maintain its leading position in the industry.
Revenue Growth and Sales Volume Increase
Dairyboard’s revenue for the financial year ending December 2022 reached an inflation-adjusted figure of $63.38 billion, representing a substantial 40% increase compared to the previous year. The growth in revenue was primarily driven by moderate volume growth and price adjustments aimed at protecting margins. The company recorded a 3% increase in sales volumes compared to the same period in the previous year, with the beverages and food categories showing impressive growth rates of 7% and 10%, respectively. Domestic market sales volumes, denominated in United States dollars, increased to 50% compared to 17% in 2021, while exports accounted for 6%, indicating the expansion of Dairyboard’s regional footprint.
Costs and Economic Outlook
Dairyboard faced challenges related to imported inflation and pricing distortions caused by currency instability. Consequently, the cost of sales and overheads grew by 46.4% and 46%, respectively. The business operating environment remains challenging, with the COVID-19 pandemic and disruptions to global supply chains impacting global economic growth. The anticipation of a decline in global demand may lead to lower commodity prices, reducing the opportunities for Zimbabwe to benefit from its rich mineral reserves.
Dairyboard Zimbabwe Limited has demonstrated exceptional performance in the face of economic challenges. The company’s increased utilisation of raw milk, coupled with a substantial revenue growth of 40%, reflects its commitment to excellence and adaptability in the dynamic business environment. Dairyboard’s strategic initiatives and resilience position it as a key player in Zimbabwe’s dairy processing industry, with significant potential for future growth and success.
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