HARARE – Seed Co’s winter cereal sales this year benefited from Command Agriculture resulting in overall volumes increasing by 257% compared to prior year, group CE Morgan Nzwere told the AGM this afternoon. Seed Co exhausted all the stocks and had to supplement with standard grade seed. “In Zimbabwe volumes went up by 358% although the margins came down largely because a large portion of seed sold was standard grade seed, all we benefited from that was a toll-processing fee,” he said. He added that the national hectarage under wheat has gone up to about 60 000 ha compared with 14 000 ha in previous years.
In Zambia wheat sales also went up by 97% benefiting from improved water supplies and stable electricity supply due to the good rains that were received. “As a result of this pent up demand we have had to increase our winter cereal seed production and this coming year we will have adequate seed in the market and there will be no need to sell standard grade seed." From the research side Nzwere noted they have managed to list a number of varieties on the COMESA catalogue. They have also managed to register 11 maize varieties, four soyabean varieties and three groundnut varieties. On the production side Seed Co is currently taking deliveries from growers but the process was affected a little bit by the late showers at the end of the rainy season which ended up delaying the dry down. However the intake is generally in line with forecasts. On the working capital side Nzwere said since year end they have collected a total of $24 million from debtors and the process is continuing.
On borrowings, he said, in Malawi, the kwacha borrowings are at 27% and they are in the process of converting these to US$ while in Zambia the kwacha borrowings are at between 20% and 24%. Nzwere noted that the US$ denominated borrowings are between 3.5% and 5.5%. On the business development side Nzwere said the group successfully produced 300mt of seed this year in Nigeria and is now targeting to produce 800mt from the crop currently in the ground. "We continue to sell parent seed in Ethiopia while pursuing the business license. In Pakistan one of our varieties is doing very well and we are looking at the logistics of producing the variety in Asia,” he said. The joint venture between Prime Seed Co – HMC is progressing and the group is in the process of rolling out the business in Kenya, Zambia, Malawi and Tanzania while at the same time intensifying development work in Francophone Africa. Commenting on the unbundling of the group Nzwere said the work is ongoing and the group is currently waiting for regulatory approvals. Giving the outlook Nzwere said it was too early in the season to tell what kind of season they are going to have but they expected earnings to grow.
The early weather forecasts are positive and indicating a normal to above normal rainfall season in the region. “In Zimbabwe, the Command Agriculture programme is continuing, with indications that volumes may be increased compared to what they were last year, and payments being through TBs and advance payments. The promising weather and the favorable prices being paid for grain will hopefully draw more farmers towards maize," he said adding that they expect Soya beans to be added in the programme. He also said the group expects to grow market share in East Africa mostly through the retail market as more farmers adopt seed varieties. The new factory and production in the Highlands has helped Seed Co to capture market share. The subsidy programme in Malawi was continuing and in Zambia the government input programme is continuing after being changed to e-voucher, which gives customers the ability to choose varieties of choice. Quton is also benefitting from the Zimbabwe government input programme as volumes increased by 33% compared to what they did last year. All the Directors were reappointed at a Directors’ Fees of $225 830 and the auditors Ernst and Young were also reappointed at a fee of $488 194.