ZAMBEEF Products Plc has pumped US$6 million in Zamanita to expand the plant’s edible oil crushing capacity and production efficiencies.
The investment is expected to increase the crushing capacity to 100,000 metric tonnes per annum, increase percentage extraction of crude oil and provide improved crude oil refinery.
Company chief executive officer Francis Grogan said Zamanita’s performance has been erratic since its purchase in 2008 due to a number of challenges.
Mr Grogan cited expensive stock, forward contracts, volatile commodity prices, inefficiencies in production and tax legislation as some of the challenges that the company was facing.
Zamanita is a subsidiary of Zambeef Products, the country’s largest edible oil producer that sells palm, soya and cotton seed oils as well as animal feed cake.
In the executive report in the company’s 2011 annual report, Mr Grogan said during the year Zamanita crushed 23 percent more soya beans and 152 percent more cotton seed leading to an increase in cake production of 27 percent.
“Critical to Zamanita is the availability of soya beans. However, domestic and regional demand for soya beans far outweighs supply and Zamanita has not been able to capitalise on its potential for soya bean crushing due to insufficient supply,” he said.
He said following the acquisition of Mpongwe farm, the group will now have capacity to internally produce up to 40,000 metric tonnes of soya beans and be less reliant on external supply.
He said once the Zampalm project in Mpika commences, Zamanita will stand to benefit through refining and selling of palm oil at a lower cost than current importation.
“The anticipated increase in the group’s soya beans output is the key driver for margin improvement at Zamanita. With sufficient internal and external supply of soya beans we anticipate Zamanita becoming even more important to the group,” he said.
Meanwhile, Zambeef opened seven new retail outlets and refurbished eight outlets this year. Zambeef currently operates 31 retail outlets in Lusaka, 33 in Copperbelt and 22 across the rest of Zambia.
Mr Grogan said an average monthly turnover growth from the new outlets has been K500 million.
The average monthly turnover from the two wholesale centres has been K2.6 million and an average increase from the refurbished stores has been 29 percent.
Zambeef has continued to partner with Shoprite, Africa’s largest food retailer with 1,246 stores and 274 franchise outlets in 16 countries across Africa and the Indian Ocean islands.
Mr Grogan said West Africa is an exciting growth division within the group as the company continues to expand its presence in Nigeria and Ghana’s Shoprite.