Dairiboard Summary

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  • Topic: Milk, Cattle, Dairy farming
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  • Published : April 15, 2013
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Dairiboard
Tinashe Mhembere
May 18, 2012

Certified indigenous
69% Indigenous (51% threshold)
30% employees, local indigenous shareholders
31% non-indigenous includes 15% Old Mutual – will be deemed partially indigenous 5% directly foreign held
Must remain indigenous – under current rules

4.5M/month local liters produced – 7M/month is demand
12M liters was peak demand + 1M liters exports = 13M/month domestic production in 1990s

current 8 liters/person/year – was 25 liters per capita in early 90s

50% market share
2 local competitors
Den Dairy (midlands) 10-12% - sell countrywide
Kershelmer Dairies (Bulawayo) 6-8% - sell nationally
11 other local dairies – 10% share
South African and Zambian imports – 20-25%

Revenues:
2011$ 95M
2012 $118M +20-24%
mostly volume, hard to raise price
market competitive, price sensitive consumers
imports are cheaper

Operating Profit:
2011$ 10.5M
2012$ 13.1M +26% -- recovering

Gross Profit – 33% last year, 32% in 2012
% Total Costs:
Milk 20%
Sugar ~5%
Powdered Milk 5% (15% of total milk consumption)
Packaging 26% (PET, HTPE, paper for secondary packaging)
Labor 20% (9-10% per year inflation; lots of catch-up)
Distribution Costs 5%
Power, Utilities 8%
Head Office 4%
Other Admin 7% (insurance, occupancy, rent)

Own all facilities except HQ office
7 dairies – operating 6 right now
1.7M liters/month processed fluid milk
– 25M liters/month is capacity
- only running at 8-10% of installed capacity, but some not available – - running 35% of fluid milk available capacity;
- running 70% of value added capacity
2.2M liter/month including reconstitution

Not just milk – into cheeses, milk, juices, tea, condiments, peanut butter, water Milk only 35%
Foods 32% mostly cheese, yoghurt, ice cream, tomatoe sauces Beverages 33%

Big problem is shortage of milk
* milk development
* importing pregnant heifers...
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