Zimbabwe’s National Foods to Reinvest USD 10 mn

February 18, 2025

(3 Minutes Read)

National Foods Holdings Limited will reinvest USD 10 million from its earnings into ongoing operations to consolidate its market position.

NATIONAL Foods Holdings Limited will reinvest USD 10 million from its earnings into ongoing operations to consolidate its market position. Since the start of the current agricultural season, there has been erratic rainfall owing to southern Africa suffering from an El Niño-induced drought leading to lower output. This has caused National Foods, one of the largest manufacturers of fast-moving consumer goods, to reinvest USD 10 million of its earnings back into the business after it had previously spent USD 40 million on capital expenditures over the past three years.

Typically, National Foods would aim for an average target of around USD 10 million a year to put back in. This year, the company commissioned new plants and a lot of its focus will be on getting them going and landing those products in the market. This is kind of going into the existing core operations. It will be mainly in the stock feed plant and the rice packing unit with some warehousing. It will rather be into the existing operations rather than new categories.

The pasta plant would produce two metric tonnes (MT) per hour after the firm invested USD 5.6 million. The company will also produce the same quantity at its biscuit plant, which cost USD 7.7 million. The pasta plant was commissioned in January while the biscuit line is expected to be completed by month end. The new breakfast/cereal plant had a capex of USD 4 million owing to a state-of-the-art Swiss Extrusion Plant capable of producing a range of products in that niche. Regarding the Bulawayo plant, National Foods replaced its old flour mill built in the 1960s with the state-of-the-art Buhler Swiss Mill, commissioned in July 2023.

Lashbrook revealed that the firm is also planning on expanding its hard snacks manufacturing, for which the firm committed USD 1.5 million to raise production capacity by 81.25% to 725MT per month. The expected completion for this investment is this month-end. In terms of the rice plant, the firm will expand by an additional 3 200 square metre rice storage and packing capacity at its existing facility with expected completion by year-end. The Information provided indicates that a total of USD 5.3 million has been committed to this project thus far. These investments are a component of the initial capex budget, which amounts to USD 40 million.

Lashbrook said the funds would be self-raised from existing operations as most of their earnings were in foreign currency. However, Lashbrook did not rule out approaching banks and financial institutions for additional support to meet its target should inflationary pressures and the worsening effects of the drought continue.