Harare, (New Ziana) – Dairibord Holdings Limited has had to streamline its operations to boost capacity to stay afloat in the face of hurdles in the economy, a senior company official has said. Presenting financial results for the year ended December 31, 2024, chairman Josephat Sachikonye described the period as exceptionally challenging, characterised by new tax rules, tight monetary policies, and exchange rate instability.
The introduction of the Zimbabwe Gold (ZiG) currency in April, he said, initially steadied exchange rates and inflation, but, by September 2024, the currency depreciated sharply, distorting pricing, and increasing production costs.
Sachikonye said further pressure came from fiscal changes, including a sugar content surtax, VAT reclassification of milk products, and higher Intermediated Money Transfer Tax (IMTT) on USD transactions.
These measures drove up costs, forcing price hikes especially for beverages which hurt competitiveness and consumer demand, resulting in the company having to eventually roll back prices to pre-surtax levels, in the process squeezing profit margins, he said.
He said operational inefficiencies, including erratic power and water supply, also raised production costs and disrupted output, while supply chain issues hampered material procurement.
Despite the challenges, the group posted a 10 percent overall volume growth, driven by strong performances in Liquid Milks (up 20 percent) and Foods (up 47 percent).
The surge in liquid milk sales was fuelled by increased raw milk supply, with Chimombe, Steri, and Lacto gaining market share. Yoghurt and ice cream under the Yummy brand led the Foods category, while improved availability of supplies boosted Rabroy Tomato Sauce sales.
Beverages, however, saw only a 1 percent growth, dragged down by Pfuko Maheu’s struggles amid sugar tax and VAT-related price hikes. USD sales accounted for 83 percent of total volume, up from 79% the previous year.
“The group continues to operate in a highly unpredictable environment marked by regulatory changes and currency instability,” Sachikonye said.
“High input costs, heavy taxation, and pricing pressures remain major obstacles.”
Dairibord is now focusing on optimizing operations and enhancing efficiency to mitigate these challenges.
New Ziana