Regional seed manufacturer, Seed Co Limited’s expansion initiatives in Africa are expected to bear fruit this 2019/20 farming season on the back of increased varieties and capacity, good weather and a generally firm demand across the region.
This comes as Seed Co is consolidating its market dominance across the continent for grain and vegetable seeds.
In Kenya, Zambia, Malawi, Tanzania, Mozambique and Ghana as well as parts of East and West Africa, the group anticipates increased sales as some countries are recovering from drought experienced in the prior year, while others have increased production after suffering product shortages.
The group is also anticipating to cash in on increasing Government support programmes across the region as well as an anticipated good rainfall.
Bad weather conditions have had a knock-on effect on agriculture-related companies while inflationary pressures have also narrowed disposable incomes. However, governments from across the region have several input programmes for their countries and the seed-making firm is angling itself to capitalise on such.
In Zimbabwe, Government is targeting 210 000 hectares of maize for the 2019/20 farming season as well as 30 000 hectares of soya bean under the Presidential Input Programme.
Government is also looking at an additional 640 000 hectares of maize and small grains under support for the vulnerable groups.
Group chief executive officer Morgan Nzwere said they were anticipating to benefit from such programmes as well as firming demand across the region.
“What we will get from Government programmes is debatable, but we will try and get a significant share of that. There is also a drive to cut on imports and this should see an increase in planting,” Mr Nzwere told shareholders at the group’s annual general meeting in Harare yesterday.
“The Government input programme in Zambia is continuing with input distribution starting on September 1, and we expect to get a decent share of the business,” he said.
In Malawi, its subsidy programme is continuing although government has decided to cut the targeted beneficiaries to 900 000 families from one million in the prior season.
Mr Nzwere acknowledged that the operating environment was increasingly becoming unpredictable, especially in Zimbabwe due to inflationary pressures. However, the company has in place strategies to stay relevant both as a business and to its market.
“In Zimbabwe, whilst as a business we are doing everything within our control to prepare for the main selling season, the operating environment is increasingly becoming unpredictable,” he said.
Apart from Government, prospects are generally good for the seed producer on the back of favourable weather conditions across the region as well as increased production capacity in some regional markets.
Said Mr Nzwere: “From the regional operations, we anticipate rebound performance with adequate product and better rainfall forecasts, unlike last year when our markets were badly affected by drought. We expect continued market share growth in East Africa.”
Kenya is expected to recover this season after it suffered product shortages as well as depressed demand last year due to drought and other supply chain-related constraints. Seed Co has since increased production capacity in Kenya, and has adequate stocks to meet local demand during the season.
In Tanzania, Malawi, Zambia and Kenya, vegetable seed business units are expected to start contributing to the bottom line following their full roll-out last financial year.
The group is also upbeat about Mozambique, Angola and the Tanzania where the seed producer has increased production to meet demand after suffering product shortages.
Other market areas are also being explored within the different countries as the firm consolidates its market share.
Business development work is continuing in Franco-phone Africa with demonstration plots of several varieties established this year in Ghana, Mali, Burkina Faso, Togo, Benin, Cote d’Ivoire, Cameroon and Congo Brazzaville.