via Govt no longer key client: SeedCO – DailyNews Live 30 June 2014 by Nyasha Chingono
HARARE – Listed agro-concern SeedCo Limited (SeedCo) says government is no longer their priority customer, with the group now focusing on East and West African markets.
The group’s chief executive Morgan Nzwere said government was their “biggest customer, but now there is no need to look to government since our market is stronger”.
“In the past we have been forced to sell to government because of volumes. But now we have our own market,” he said.
This comes as government owes SeedCo $20 million-plus.
“Trade receivables have gone up 23 percent to $75 million. Almost half of this is due from Zimbabwe government and related institutions.
“This debt is fully acknowledged but the liquidity challenge the government is facing makes it difficult to predict when this amount will be received,” Nzwere said.
He said although government debt remains a concern to the group, the State was in the process of paying.
Part of the debt dates back to 2007 when the government carried out a national inputs programme under “Operation Maguta”.
Under the programme, government acquired more than 800 tonnes of maize seed from SeedCo at about $2 500 per tonne through a credit arrangement.
It undertook to pay back either in cash or in the form of fertilizer under a batter arrangement.
Meanwhile, SeedCo has made forays into the $250 million Nigerian seed market as part of efforts to strengthen it’s off shore investments.
“Nigeria is an important market for us. If we can intensify our strategies by 2015, it will be good for us,” Nzwere said.
The Ethiopian, DRC, Zambia, Malawi and Kenyan markets all recorded an increase in volumes last year and the seed company projected sustained growth.
“We see continued growth in East Africa,” Nzwere said.
In the year to March 2014, the group’s revenue increased by nine percent to $120 million from $110 million in 2013.
Maize seed volumes increased by 16 percent, while winter cereal sales went up 31 percent. The company recorded poor cotton and soya bean seed volumes during the period under review, with the regional revenue contributing 72 percent of the group’s total earnings compared to 70 percent in prior year.