SeedCo International anticipates maize seed production volumes of 34 000 Mt, a 6% increase over last season, which will be sufficient to replenish stocks and meet demand in the markets where it operates.
Most of its markets are closed during the first half of the year. Group chief executive officer Morgan Nzwere told shareholders at the company’s annual general meeting that they hardly sell anything except for Zambia, where they do sell some winter cereals and a bit of maize seed sales in Nigeria because of the different seeds that they have there.
In terms of performance, the regional business increased volume by 11%, with all of this occurring in Zambia.
“We are now starting to see some sales momentum in terms of the rest of the summer crops,” he said.
“Our maize season will effectively start in October when the rains come in most of these markets and we should start seeing some volumes going up significantly.”
In Nigeria, maize seed sales were 13% lower than the prior year.
“We had some stock shortages. We actually ran out of stocks, which is a result of the big government order that we got in the prior year, which wiped out carryover stocks and the production that we had planned had not taken into account this wiped out by the government order.
“So we ended up producing stocks that were not adequate to meet market demand,” he said.
In Kenya and Tanzania, they recorded a second-season drought and that put a damper on the sales.
Regional seed sales increased by 40% over the previous year.With a new market, Mozambique, coming on board, Nzwere said margins are also improving as the contribution of hybrid sales continues to increase.
“It shows some good signs of growth, not as much as we would want to see, but definitely showing the right projector,” he said.
In research and development, the group continues to produce very exciting products that compete very well with the products coming from other seed houses. He stated that potato trials are currently underway, with plans to commercialize in three years.
He said the seed intake from growers is going very well, more or less at about 35% in terms of intake for maize and 55% for soya beans. On the working capital side, the group had about US$47 million in trade and receivables and had collected about 50% of this.
“Efforts to collect the balance are continuing,” he said.
Total stocks, including the carryover quantities, will be about 52 000 MT, which will be 13℅ higher than they had in the prior year.
“It should be more than adequate to meet anticipated demand as well as any opportunistic sales.”
In the outlook, he said the group has adequate stocks to meet anticipated demand this year, unlike last year.
“The Russia-Ukraine war does create opportunities for import substitution in terms of grain, and we are seeing many countries engaging in activities to try and make sure they are self-sufficient in terms of those products that they used to import, particularly from this volatile region,” he said.
“We are also expecting increased business in West Africa, Angola and DRC. The volumes in the last couple of years were affected by funds being diverted to the COVID-19 initiative and as it stabilizes, we think those funds should also start gravitating to our business.”
At the AGM, directors’ fees were approved at US$272 397 and auditors’ fees at US$125 279 – Harare