National Foods Limited says challenges acquiring foreign currency have led to an erratic supply of some goods and forced the company to increase prices on all its goods.
The company’s statement comes as the Ministry of Industry and Commerce is reportedly holding closed door meetings today (Monday) with retailers and manufacturers over recent price increases, specifically after the implementation of the government’s monetary policy in October.
In a statement after an Annual General Meeting in the capital, National Foods Limited Group chief executive officer Michael Lashbrook said prices had gone up for virtually all products especially those that required imported raw materials to manufacture.
“Product supply has been largely consistent to the market in most categories although supplies of some products which use imported raw materials such as cooking oil and salt have been impacted by foreign currency availability.
“In the recent quarter inflationary pressures have increased significantly, particularly on imported items, unfortunately this has resulted in price increases across the basket of goods we produce,” he said.
Lashbrook said company profits for the first quarter “largely met expectation” although he did not disclose a figure.
He said National Foods would “continue to work closely” with the Reserve Bank of Zimbabwe in order to ensure it has enough foreign currency for it wheat input requirements.
The company recorded a 25.6% increase in volumes for the first quarter of the new financial year compared to the same period last year with notable increases for maize and stock feeds, of 55% and 44% respectively.
Lashbrook said these increase came from locals selling to the Grain Marketing Board as well as the poultry sector recovering from a recent outbreak of Avian Influenza.
Another major increase came from brands such as Iris biscuits and Wing, which saw a 48% increase in volumes.
The group CEO said the company’s flour unit was operating at maximum capacity and although it was looking at various options to expand it would likely remain the case for the “foreseeable future.”
He said the company would continue to engage with local farmers in order to source domestic inputs for production.
“This summer our contract farming schemes will amount to 9000 hectares of maize, soya beans, sugar beans and popcorn,”Lashbrook said.
National Foods is registered on the Zimbabwe Stock Exchange and is one of the largest manufacturers of food stuffs as well as stock feed with major brands such as Red Seal, Gloria and Mahatma Rice and Better Buy.
According to the Consumer Council of Zimbabwe the family food basket increased by $55.48 or 35.5% from $156.20 in September to $211.68 by the end of last month.