Dairibord consolidates operations into two subsidiaries
HARARE – Milk processor, Dairibord Holdings has consolidated operations into two subsidiaries namely Dairibord Zimbabwe (Pvt), Dairibord Malawi in an exercise that will see the group achieve at least 10% savings on costs.
The initial phase of group restructuring commenced in January 2016 in the wake of reduced revenues and a deteriorating macro-economic environment. “The targeted cost savings will accrue over time. By year end we are expecting to have reduced our selling and administration costs by 10% following the consolidation of local operations,” Group corporate communications manager Imelda Shoko said in an emailed response.
According to Shoko, Dairibord Holdings has since moved offices from ZB Life Towers to Dairibord Zimbabwe Pvt Ltd Premises at 1225 Rekayi Tangwena Avenue in Belvedere. “The idea behind the consolidation of the business is to bring all key resources close to where the action is. Former Lyons premises, offices along Simon Mazorodze, now house the Marketing Services department and Audit while the rest of the functions are at the Dairibord Zimbabwe (Pvt) Ltd Rekayi Tangwena premises,” she said.
Meanwhile Shoko said the recently commissioned cartonised Chimombe plant is now operating at 40% capacity. However production of additional milks and beverages on this line will increase capacity beyond the 40% by the end of the first half of 2017. Output at the cartonised Chimombe plant was targeted at 3 million litres per month.
The plant installed at a cost of $4,5 million is part of the $7.5 million the group had budgeted in order to ramp up production and increase revenue. Other investments include expansion of the Maheu and peanut butter plants.
Dairibord reported a loss of $1.9 million in the six months to June, 2016 after revenue dropped 12% to $42.5 million due to pricing pressures. The group said the decline was a result of consumer price adjustments made to address affordability and competitiveness against a static volume performance. The average consumer price realised, per litre of product sold, was 11% below prior year.