BY TAFADZWA MHLANGA/VANESSA GONYE
SEED Co Limited posted a 24% reduction in its sales volumes for the nine months ended December 31, 2019, reflecting Zimbabwe’s ongoing economic challenges and drought.
The reduction in sales volumes saw the group register a reduced profit of $309 million for the period, down from US$23,2 million ($414,35 million, based on current forex rates) in the comparative 2018 period, a decrease of nearly 25,5%.
“The reduction in sales volumes, in both the third quarter and the nine months to December 31, 2019, was mainly due to: low onset of the season and unfavourable weather forecasts which discouraged farmers from purchasing seed,” Seed Co company secretary Terrence Chimanya said in a statement accompanying its results for the period under review.
“… negative impact low disposable incomes on consumer demand; reduced government uptake of our seed; fuel shortages affecting land preparation by farmers for the current summer season; and electricity and water shortages incapacitation wheat farmers from growing crops under irrigation last winter”.
The company reported that the challenges it was experiencing had resulted in the firm continually implementing measures to preserve value.
However, amid the challenges, the company managed to secure funding to pay for all seed deliveries from growers and funded the processing of the seed in preparation for the selling season.
“Striking a balance between cost containment and continuing in business (operating and retaining skills) profitably is now part of the company’s challenging daily routine,” Chimanya said.
“Going forward, preserving capital remains a challenge as the board and management is seized with the Zimbabwean context. The company will also bank on its regional associate investment, Seed Co International Limited, for real capital preservation and earnings.”
Seed Co announced that it was also continuing with its major project of constructing a flagship artificial maize seed drying plant at the company’s Stapleford Complex, just outside Harare, with all the equipment being received from Denmark.
“The outlook remains highly unpredictable due to the current harsh economic environment. The company’s sales volumes are expected to close the current financial year lower than the prior year due to challenges mentioned above,” Chimanya said.
“However, the company remain profitable despite the following; adoption of the new standard on leases by the company this reporting year (IFRS) and the adoption of the IAS 29 (Financial reporting in Hyperinflationary Economies).”
Meanwhile, plant breeders have been urged to find solutions for agricultural practices and systems that are suitable for different regions, soil types and climates as the country faces another drought.
Speaking at the just-ended Zimbabwe Plant Breeders Association congress at the University of Zimbabwe, Seed Co regional managing director (southern cluster) Denias Zaranyika said with all the advances in agriculture, breeding methods and food systems, hunger was still an enemy that must be fought, subdued and eliminated.
“Standing at the frontline of this battle to end hunger are yourselves, plant breeders. This congress is coming at the back of newer and further advancements in plant genetics which when used in breeding, help support higher production and cultivation of crops resistant to pests, pathogens and drought,” he said.
Zaranyika said the use of knowledge in seed genetics to make selections allowed plant breeders to reach conclusions on both the appropriate parent materials and the resultant cultivars that were suited to the prevailing growing conditions of particular agro-ecological areas.
He said with the significant rise in population, various agricultural performance indicators provide evidence of relative decline in agricultural production, highlighted by the huge number of the people that are food insecure as well as increases in food prices and an increased need for food imports.
“Most of our people live in rural areas where the main source of income is the sale of agricultural produce which accounts for a significant 48,4%. Cropping is largely rain fed making rural farming more vulnerable to the vagaries of climate change which significantly impairs agriculture leading to food insecurity, water scarcity, health challenges and ultimately constraining economic growth and development prospects,” Zaranyika said.
“There is no doubt in my mind that the onerous responsibility to ensure a food secure nation rests on you, our plant breeding experts. I want to urge you to intensify collaborations, international exchanges and visits.”