[2008-09-17]  Colcom Benefits From Outgrowers Scheme
Colcom Benefits From Outgrowers Scheme
Meat processor Colcom has started seeing the benefits of its outgrowers scheme where it has resuscitated seven piggeries and now has three active outgrowers who supplied 6 120 pigs to Colcom in the 4th quarter of last year. Managing director Mr. Gavin Sainsbury told analysts last week that in the current financial year the group would take in around 400 pigs a week from outgrowers, which was around half of the 930 pigs that came from its Triple C facility. He revealed that at present depressed capital resources were affecting livestock numbers.” At the moment we simply do not have the working capital resources to buy the pigs upfront and for the foreseeable future we will be locked into our own supply”. He said it is difficult growing a business with a long working capital cycle, indicating that the group would Endeavour to keep livestock intake constant by diverting company resources to get necessary stockfeeds.The group requires 400 tonnes of maize and 100t of soya meal a week. Turnover for the year was $9,7mn against $43 in prior year. Fair value adjustment was $36,4mn compared to $23 previously. Finance director Mr. Kenias Horonga pointed out that of the fair value adjustment, $18mn was due to IAS41 revaluations on the pigs, an increase of 106,3mn percent, while $18,3mn was a fair value adjustment on equities, a 304mn percent improvement on the year. By sector the group's performance was mixed on the back of price controls that affected pricing and returns on the business during the year. In manufacturing, total pig supplies were up four percent, owing to out growers as 3rd party pig sales had declined 12 percent as a result of price rollbacks.Mr Sainsbury lamented pricing saying "price increases are not frequent enough".Slack regional demand saw volume outflow at Danmeats drop 22 percent in the second half of the year. However, a 247 percent surge in toll manufacturing offset the effects with volumes ending ten percent lower in the period under review. The group also brought baked beans onto the market in the period, processing 85 tonnes with the line contributing 21 percent of total canned sales. Ostrich exports grew 314 percent to 5 700 birds. Mr. Sainsbury expects the slaughter of a similar number of ostriches in the current financial year.


Source: ALLAFRICA