HARARE: Seed Co Limited has received $50 million from regional banks for its local and foreign operations so far this year, the group chief executive officer, Morgan Nzwere has said.
He said foreign businesses now contributed 60% of the group’s revenue across the board and from the company’s regional operations in Botswana, Kenya, Malawi, Zambia, Tanzania, Nigeria, Rwanda, the Democratic Republic of Congo and others, where the group is into seed production. Nzwere said the local market contributed 40% to revenues. Part of the $50 million will go towards research and development.
“We have been able to access cheaper facilities within the region and have been able to borrow $50 million, at between 4% and 5% using our balance sheet from banks in the region. They (foreign-based operations) probably contribute about 60% of our business,” Nzwere said.
“Zimbabwe is still an important market, as it still contributes almost 40% of earnings, so you cannot ignore it. We will be focusing on growth, but we realise that you cannot rely on just one market, you have to spread your wings.” For the half year ending September 30, Seed Co recorded an after-tax loss of $5,5m compared to $7,6m during the same period last year.
The company said the business operating environment was challenging, as major markets were severely affected by the slowdown in commodity demand linked to the Chinese economy.
Nzwere said borrowing from banks in the region helped the group achieve a 17% increase in turnover to $18,8m, as there was a slight recovery of the winter cereals demand and early maize seed sales in Zimbabwe, Kenya and Botswana. He said Malawi was repaying their debt, which would help increase its operations and that they remained a major partner.
Operating costs were up, due to the coming on board of the vegetable business in the acquisition of Prime Seeds, as well as additional expertise in research and development and increased depreciation on property, plant and equipment in Malawi and Zambia. Other income went up due to exchange gains in Zambia and an increase in non-seed disposals.
