“Our share price has been on the slide and I think a large reason for that is during the year, we did have significant negative publicity surrounding our imported beef product. Obviously that impacted our reputation and our image,” Yusuf Koya, executive director of Zambeef Products told CNBC Africa.
The Zambian based agri-business reported a 19 per cent decrease in Earnings before Interest, Tax, Depreciation, and Amortization (EBITDA) from 27 million US dollars in 2012 to 22 million US dollars for the year ended 30 September 2013.
Adjusted pre-tax profit was also down 63 per cent to 6 million dollars, from 15 million dollars last year.
Koya further explained that press articles released in June this year stating that the company were allegedly importing a number of contaminated beef products from Ireland, the United Kingdom and America.
According to reports, independent tests were completed on the imported products and confirmed that a harmful chemical called Aldehyde was present. The negative publicity tarnished the group’s image and reputation.
“Obviously if you get negative publicity along those lines then it’s bound to affect your business,” he said.
On the other hand, the company saw revenue growth of 18 per cent to 300 million dollars for the period and its directors are said to be preparing the company for further growth.
Zambeef chairman, Dr Jacob Mwanza, stated in a press release that it is heartening to see the company return to positive cash generation and that the group is well positioned for future growth.
“It is heartening to see revenues continue to increase at the same time as the directors prepare the business for future growth across a number of divisions. A key financial highlight this year has been to return the business to positive cash generation, which is in line with the strategy set out when Zambeef listed on the AIM Market of the London Stock Exchange in June 2011,” He said.
The group, which has operations in Zambia, Nigeria and Ghana, has also partnered up with South Africa’s RCL Foods [DATA RCL:RCL FOODS LTD.], formerly known as Rainbow Chickens, to construct a hatchery in Mpongwe district in Zambia, called the Zamchick and Zamhatch projects.
Koye explained that the projects entail the development of a hatchery breeder farm and stock feed production which should be operational within the next 12 to 18 months. The partners expect a weekly production of one million chickens for slaughter from the operation once complete.
“There’s another joint venture we did with Rainbow Chickens which is Zamhatch and Zamchick. It’s a hatchery business for the development of a hatchery breeder farm and stock feed production which we hope will be operational within the next 12-18 months,” he added.
“We’re looking forward to that partnership. Obviously rainbow is a preeminent chicken producer in South Africa and their technical expertise, knowledge and track record is what we’re looking forward to developing in Zambia.”