Macro store demand drives Zambeef growth

June 6th, 2018

Food retailer reports improved profit for the first half

LUSAKA, ZAMBIA – Improving economic conditions and new Macro stores have helped food processor and retailer Zambeef Products grow its business in the first half of the financial year.

The company reported profit after tax of K23 million, up more than three-fold compared with K5.2 million in the corresponding period of last year. Volumes and gross margins increased in its retail and cold chain food products (CCFP), stockfeed, and the cropping divisions.

The improvement in revenue was set against a backdrop of an 18.8 percent increase in costs, particularly for electricity, fuel and levies, and the impact of cholera earlier in the year, said the company, which reported its financial results this week for the six months to March 31, 2018.

“We have entered the second half of the financial year with a renewed sense of optimism that the difficult times of recent years are hopefully behind us. We have used that time productively to establish a solid platform from which to move forward now that market conditions have started to improve,” said Chief Executive Officer Francis Grogan. “The continued dedication of our management and staff, supported by a strong board, remain key to this as we progress into an exciting new phase of growth.”

Zambeef’s chain of 205 retail outlets – both own-brand and within Shoprite supermarkets – remain at the heart of the business, with demand from consumers driving supply throughout the business and reinforcing its position linking the country’s farmers with consumers.

“Zambeef’s retail operations are growing from strength-to-strength, with four new Macro retail stores and one Shoprite store opening in Zambia and in Nigeria in the first half of the financial year. This growth emphasises the Group’s market-driven approach, through which retail demand drives production along our value chain,” explained Mr Grogan.

The Macro stores, which sell Zambeef’s full range of cold chain food products, along with Novatek stockfeed, and in some instances Zamleather’s Zamshu brand footwear, are bringing world-class standards of hygiene, service, security and affordability to low- and medium-density urban and peri-urban areas, he added.

Meanwhile, Zambeef’s second Novatek stockfeed plant was commissioned by President, Edgar Chagwa Lungu at Mpongwe Farm on the Copperbelt in October 2017, and it is already operating at over 40 percent capacity, producing 25,584 tons during the period.
In addition to increased demand throughout its retail network, demand for day-old chicks from Zambeef’s Zamhatch subsidiary is exceeding supply. This reinforces that Zambeef is an integral part of the nation’s agricultural supply chain, with more than half of the company’s chicks sold to small-scale farmers and entrepreneurs who then serve the traditional live-bird market, which still accounts for 75 percent of poultry market share.

Zambeef spent US$7.5 million on capital investment for continuing operations in the first half of the year, with US$16 million budgeted for the full year. Four additional Macro stores are scheduled to open in the second half of the year, including the flagship Heroes Macro in Lusaka, which opened in May 2018. Some 14 sites have been bought and await development, keeping the company on target to open 10 new Macro outlets every year.


Retail demand: driving Zambeef growth

Retail demand: driving Zambeef growth

About Zambeef Products Plc
Zambeef Products Plc is the largest integrated cold chain food products and agribusiness company in Zambia and one of the largest in the region, involved in the primary production, processing, distribution and retailing of beef, chicken, pork, milk, eggs, dairy products, fish, flour and stockfeed, throughout Zambia and the surrounding region, as well as Nigeria and Ghana.

The Group is also one of the largest cereal row cropping operations in Zambia, with approximately 7,787 hectares of row crops under irrigation which are planted twice a year, and a further 8,694 hectares of rainfed/dry-land crops available for planting each year.

The company slaughters around 78,000 beef cattle, 7.3 million chickens and 60,000 pigs per annum, while also processing 19 million litres of milk, producing 154,000 tons of stockfeed, 69 million eggs, 68,000 pairs of shoes and processes 100,000 hides in its tannery per year.

It has 195 retail outlets throughout Zambia and West Africa.

Zambeef employs over 7,000 people with a total of K357 million paid in remuneration and benefits in the last year.

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