Seed Co develops more varieties for regional markets

the herald

Enacy Mapakame –business journalist

A seed producer listed on the Victoria Falls Stock Exchange (VFEX), Seed Co International is developing more seed varieties for cereals and vegetables that suit the conditions of its regional markets with the aim of increasing agricultural yields and food security. .

This comes as poor weather conditions due to climate change have affected production, creating opportunities for earlier and more profitable seed varieties.

In an operations update for the year to March 30, 2022, Group Chief Executive Morgan Nzwere highlighted several varieties that were launched during the financial year while trials for others are on the way. also still ongoing.

The group has released five new varieties in Zambia, four in Malawi and licensed early maturing yellow maize varieties in Nigeria, as well as a superior hybrid aimed at improving ease of production.

Mr. Nzwere added that the group has also licensed a striga-tolerant yellow sorghum variety for marketing in Nigeria as well as four rice varieties that have also been licensed for marketing in Zambia and Malawi, while pilot productions are in progress. In progress.

This is in addition to SC Signal and SC Saga soybean varieties officially launched in Malawi while the same have been registered in Ethiopia.

According to the group, rice hybrid trials are continuing in southern, eastern and western Africa while potato hybrid registration trials are underway.

“Several vegetable hybrids are commercialized in our markets,” Mr. Nzwere said.

In terms of production, Mr. Nzwere said product availability was generally good during the year, although preparation for marketing was delayed by late drying due to the excessively wet season of the year. previous (FY21).

“Stockouts have been recorded in Nigeria and Kenya due to poor production in previous seasons (floods in Nigeria and drought in Kenya).

“Production for the 2022/23 maize season, currently at the admission stage, is expected to be 5 percent higher than the previous year’s 32,000 tonnes, but could be lower due to erratic rains which affected growth and pollination. Winter wheat production is also underway in Zambia,” he said.

Group figures show total sales volumes were 11% lower than the previous year with the main crop – maize down 19% due to a 50% reduction in the contribution from government subsidies in Malawi, which also saw Seed Co Malawi volumes fall by 32%.

In Zambia, late rains and the impact of price increases caused volumes to decline by 14%, while product unavailability dropped by 34% in Nigeria. Other factors such as drought in Kenya and product shortages resulted in a 12% drop in volume.

However, volume performance in Tanzania remained stable as activity consolidated, while volume more than doubled in Mozambique helped to partially offset the loss of volume in most markets.

In terms of financial performance, the group recorded a decline in profitability recording a profit after tax of US$7.1 million compared to US$11.1 million the previous year due to the contraction of the gross margin mainly in Zambia as the kwacha appreciated and reduced economies of scale. while volume fell by 11% – with significant declines in Malawi, Zambia and Nigeria.

Group Finance Director John Matorofa attributed the decline to increased operating costs due to the impact of the strong kwacha in Zambia as well as increased business activity in Mozambique. Revenue was flat at $88.5 million, albeit due to reduced sales volume, helped mainly by the strengthening of the Zambian kwacha against the US dollar and growing business in Mozambique.

Gross margin was moderate due to reduced economies of scale and the impact of a stronger Zambian kwacha on cost of sales.

Overheads increased due to marketing and commercial efforts in anticipation of a normal season which unfortunately turned out to be unfavourable.

Despite the uncertainties caused by the conflicts in Ukraine as well as the uncertainties linked to the elections scheduled for August in Kenya and next March in Nigeria, Seed Co International remains optimistic about its performance thanks to its strategic position in food production.

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