NATIONAL Foods Holdings will invest $30 million in upgrading its flour mills to boost revenue as the company battles imports that have eaten into its market share, a company official said on Tuesday.
In a four month to October 31 trading update after the company’s Annual General Meeting on Tuesday, group chief executive Jeremy Brooke said internal resources would be used for the investment.
Turnover was up 6.2 percent compared to the prior year.
“We are going to invest over $30 million in flour mills in the next two years,” Brooke said.
The group’s income for the year ended 30 June 2013 grew 26 percent to $296 million with volumes rising 21 percent.
Overall profit before tax at $17.2 million was 61 percent higher than the previous year.
Brooke said profitability was below budget primarily due to the expensive wheat pipeline installed and the influx of cheap imports resulting in the capacity utilisation at its mills falling to 44 percent.
However, the company has eight months’ stock of raw materials and stock feeds orders, which stands it in good stead.
Natfoods’ stock feed business posted volume growth of 38 percent on prior year to 167,000 metric tonnes, driven by improved sales of beef and poultry feeds.
Maize volumes were 10 percent down due to increased competition.
The contribution of the fast moving consumer goods unit remained flat, despite recently launching new rice varieties.
Brooke urged government to enforce duty protection on imports to protect local companies.
“The impact of imports means that we don’t run the factories as well as we should. It is very destructive to us and also to the country,” he said.
National Foods is an associate company of Innscor Africa. Innscor holds 39.35 percent of the company’s issued share capital, while South Africa’s Tiger Brands has nearly 39 percentAdvertisement