FOOD processor Colcom Holdings has entered the Angolan market as it seeks to boost its capacity utilisation to 100 percent, from the current 55 percent. The company expects the Angolan venture to also increase its after-tax profit by over 100 percent after a year. Group chief executive officer, Theo Kumalo, said the company was targeting Angola as one of its major export markets. He said Colcom Foods activities in Angola were still at exploratory and promotional stages.
“Sales executives have visited Angola to explore market opportunities with potential customers and, further, Colcom Foods is participating in a Trade Fair in Angola,” he said in response to questions from the Financial Gazette’s Company & Markets. Colcom manufactures pork, beef and chicken products. Apart from Zimbabwe, it also operates in Malawi and South Africa.
“The products that may be involved will depend on market requirements in that country, but a whole range of Colcom Foods’ products are currently being shown to potential customers for their consideration,” he said. Angola has recently become one of Africa’s fastest growing economies, with a growing middle class whose disposable incomes have been significantly boosted by an influx of investors into its booming oil industry. This could be one of the key attractions for Colcom, which has had to contend with a weakening demand in Zimbabwe.
For the six months to December 31, 2013, Colcom’s turnover was up 13 percent to US$33,9 million while operating profit advanced 108 percent to US$3,7 million despite Colcom Foods showing a 10 percent decline in revenue following the closure of its frozen pies division.
Associated Meat Packers, a unit of the group, achieved a 103 percent growth in revenue over the comparative period.
Basic earnings per share were up 68 percent to 1,19 cents. Despite recording strong growth during the period under review, the group anticipates subdued consumer spending during the year. Its Triple C division is currently facing viability challenges due to price fluctuations on the world market, high transport costs and depressed prices offered by meat processors.
Going forward, the group says it will remain flexible on pricing, continue to review pricing and respond more quickly to shifts in the market to ensure it remains competitive. Colcom has emerged from the doldrums which it suffered in 2012, driven by its continued investment in new plant equipment and a revamped refurbishment exercise.
The company had been negatively impacted by obsolete and antiquated equipment which had compromised quality and efficiencies for the meat manufacturer.