ZIMBABWE Stock Exchange-listed beverages maker Dairibord Holdings Limited has moved to dispel rumours of its exit from the country, reaffirming its commitment to its local operations while pursuing regional expansion plans.
Last week, speculation gripped the market that the firm was preparing to close its local operations after one of its mainstay products, Steri Milk, appeared to have been produced at the company’s South African toll manufacturing plant.
This comes as several local companies have been closing or entering corporate rescue due to a rise in the cost of doing business, driven by high taxes, exchange rate volatility, declining utility services, and policy inconsistencies.
However, in an interview with businessdigest, Dairibord chief executive officer Mercy Ndoro said the company had no plans to abandon its Zimbabwean operation.
“Dairibord notes with concern various online media reports on the purported closure of its Zimbabwe operations and subsequent relocation to South Africa. The position is that Dairibord has a longstanding history of successfully exporting its heritage brands to South Africa and other regional markets, failing to meet demand,” she said.
“Resultantly, Dairibord has initiated strategies to optimise supply and distribution channels in South Africa. The intention is to replicate this model in adjacent markets such as Zambia, Botswana, and Mozambique. This will increase the company’s foreign currency generation capacity, which will not only benefit the company but also the country at large.”
She said the Africa Continental Free Trade Area had made regional positioning a major strategic priority.
“Dairibord remains firmly committed to its Zimbabwean roots and will continue to operate within the country. The company is investing in capacity enhancement to support its growth ambitions,” Ndoro said.
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“These investments are a clear demonstration of the company’s confidence in its future and unwavering dedication to serving the local and regional markets.
“Dairibord remains steadfast in its commitment to providing quality, nutritious milk, food, and beverage products to Zimbabwe and beyond, as the Zimbabwean operations remain the backbone of the expansion drive.”
She confirmed that the Steri Milk product circulating on social media was indeed produced in South Africa under its toll manufacturing arrangement and was intended for sale in South Africa.
“Its presence in Zimbabwe can be attributed to cross-border smuggling. The domestic market continues to be served by products manufactured at the Dairibord Chipinge plant,” Ndoro said.
She added that Dairibord had previously experienced challenges in fulfilling export market demand for some of its products, which was why the company adopted the new strategy.
“The establishment of toll manufacturing now enables our customers to collect products within South Africa, eliminating the need for transportation from Zimbabwe,” Ndoro explained.
“It has also improved product supply in South Africa and surrounding markets, particularly Botswana.”
Ndoro said the company was targeting a 100% increase in export volume this year.
“Export growth is a priority for the organisation, for foreign currency and revenue generation,” she said.
The Dairibord chief added that capital expenditure investments for the year would focus on increasing capacity and replacing aged machinery.
