Business Correspondent
Harare, — Dairibord Holdings Limited, a leading dairy producer, reported significant challenges due to erratic power and water supplies during the first quarter of 2025, forcing the company to rely on expensive alternatives and driving up operating costs.
Despite these hurdles, the firm achieved a 14% growth in consolidated sales volumes, buoyed by strong performances in its beverages and food divisions.
In a trading update for the period ending March 31, 2025, Dairibord highlighted that persistent utility shortages, compounded by liquidity constraints and cost pressures, strained operations.
“The erratic supply of utilities required the use of expensive alternatives for power and water, contributing to rising operating costs,” the company stated.
These challenges are particularly acute for perishable goods producers like Dairibord, where consistent utility access is critical.
To mitigate disruptions, Dairibord prioritized scaling production across key product lines. Beverages led the growth with a 24% surge, driven by strong demand for Pfuko maheu and Quickbrew tea. The foods category rose 19%, supported by yoghurts and Robroy tomato sauce.
However, liquid milk volumes dipped 6%, attributed to production halts at the Steri Milk plant and a strategic shift of raw milk toward yoghurt production.
By category, beverages accounted for 66% of total sales, liquid milk 25%, and foods 9%.
The company also saw a 36% year-on-year increase in export volumes, bolstered by its expanded regional footprint. A toll manufacturing plant in South Africa recently ramped up production of Steri Milk, enhancing export earnings.
Quarterly revenue climbed 18% to $31.3 million, with 95% of sales now USD-denominated, up from 85% in 2024.
Dairibord acknowledged ongoing hurdles, including pricing distortions that pressured formal retail channels.
“Sustained pricing distortions necessitated agility and adaptation to evolving route-to-market dynamics,” the firm noted.
Looking ahead, the group plans to maintain growth momentum into Q2 by optimizing production capacity and tightening cost controls.
“The group will continue to prioritize cost management and positive cash generation to strengthen financial performance,” Dairibord affirmed.
As Zimbabwe’s utility infrastructure struggles to meet demand, Dairibord’s blend of strategic pivots and export-focused investments underscores its efforts to stabilize operations in a volatile environment.
Zim GBC News©️