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Chairman’s Statement
2004
OVERVIEW
I am pleased to report that the financial year ended 30th September
2004 has been an excellent year for Zambeef despite very difficult
trading conditions. Turnover has increased by 35% and net cash
inflow from operations has increased by 76% resulting in an increase
in the dividends paid and proposed for the year by 8.6%. Profits
after tax were marginally down by 6.6%. However, in light of
unbudgeted for VAT regulation changes which cost the company around
K400 million per month and reduced margins in the beef division due
to severe restrictions on the movement of traditional cattle
resulting in Zambeef having to reduce its processing operations, the
company can be very proud of its results. The period has seen
significant growth in turnover and profitability of all divisions
with the exception of the beef division.
VISION
Zambeef vision is to continue leading as Zambia and the region's
benchmark in the production, processing, distribution and retailing
of beef, chickens, eggs and dairy products.
Our expansion and investments over the last year have been in line
with this vision. Significant investment has been made into
expanding, developing and improving the efficiencies and standards
in each of these sectors. In particular the dairy, chicken and egg
divisions have shown excellent growth in line with this investment
and have reduced the reliance of the company on the performance of
its beef division.
In order to improve the efficiencies of these divisions significant
investment has gone into expanding and developing Zambeef’s farming
operations and feedplant operations. Zambeef was for the last
financial year one of the largest cropping operations in Zambia
which allowed the group to grow a significant amount of the raw
materials for its stock feed plant.
This vertical integration has allowed the group to control both the
supply and cost of a significant percentage of its input costs and
ensure the Groups is competitive in the region.
The retailing division has continued to expand with new outlets
being opened in identified high volume areas while existing outlets
have been upgraded to ensure Zambeefs production is marketed
directly to the end consumer.
REINVESTMENT
During the financial year under review, Zambeef reinvested in excess
of K17 billion into its Zambian operations. One of Zambeef’s main
strengths has been its significant reinvestment policy since the
company’s incorporation.
FUTURE INVESTMENTS
On 15th October 2004, shortly after the year end, Zambeef concluded
the acquisition of an irrigation project on the shores of Lake
Kariba in Sinazongwe. The Company plans to fully develop this farm
into a 2,000 hectare irrigation project over the next two years. The
Board took the strategic view during the year to expand its cropping
activities only in areas with secure irrigation potential. This
project when fully developed will make Zambeef one of the largest
cropping operations in Africa with 2,700 hectares under irrigation
between the Chisamba and Sinazongwe farming schemes. Again this
complements Zambeefs continued expansion of its feedlotting, poultry
and dairy operations where the company currently feeds 120 tonnes of
feed a day. Zambeef hopes to, through its feed and livestock
operations, add value to a significant part of the production from
this expansion of its cropping operations.
In line with this increased cropping output, the Board has approved
the building of a new modern stock feed plant which will be
commissioned during the year and provide not only the stock feed for
Zambeef’s own livestock divisions but to third parties both within
Zambia and the region.
FULL LISTING ON THE LUSAKA STOCK EXCHANGE
Zambeef products Plc was quoted on the Lusaka Stock Exchange on 14th
February 2003 making the Company one of the first companies to list
other than through the privatization process. The excellent response
received by the public to this quotation has resulted in the
Directors of Zambeef considering a full listing on the Lusaka Stock
Exchange during the coming financial year.
CORPORATE GOVERNANCE
Corporate Governance has received a great deal of attention
throughout the world in the last year. The Board of Directors of
Zambeef Products Plc is fully committed to the principles of
integrity, accountability and openness. The company is fortunate to
have a Board of Directors of the highest quality and integrity with
a good balance of skills and experience and recognizes that the
primary responsibility for corporate governance rests with the
Board. The issues of Corporate Governance are elaborated on in
detail further in these financial statements.
APPRECIATION
I wish to convey my sincere thanks to the members of the board, the
management and staff of Zambeef for their dedication and hard work
over the last year making this such a successful year. The company
can look proudly on its achievements and look forward to continued
growth in the next year.
Dr. Jacob Mwanza
Chairman
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