Libstar says Italian food imports for Woolworths have stringent safety measures in place for COVID-19

South African food producer, Libstar, has reported a 2.4% increase in annual revenue, with a substantial rise of 10.1% in headline earnings, driven by their grocery and perishable food division. The company's Group Commercial and Financial Director, Robin Smith, discussed the impact of the coronavirus on their sales and supply chain in an interview with CNBC Africa. Smith explained that the profitability increase was primarily due to a more favorable mix of products sold, rather than higher pricing. He highlighted the importance of maintaining and improving margins in the currently challenging pricing environment by enhancing operational efficiencies. When discussing the impact of the coronavirus on Libstar, Smith noted that it was too early to assess the full repercussions, but the company was focused on optimizing capacity, stock holding, and customer communication to mitigate potential disruptions to their supply chain. He emphasized the importance of proactive measures to counter any slowdowns in delivery from import and export markets. One such example was the proactive approach taken by Libstar's business unit that imports food from Italy for Woolworths, wherein increased order levels were implemented to account for potential shipment delays later in the year. Smith reassured that strict sanitation protocols were in place to prevent any risk of importing the coronavirus onto store shelves. Despite economic challenges in South Africa, including the impact of the coronavirus, ongoing power uncertainty, and economic slowdown, Libstar remains committed to driving growth and maintaining margins through innovation and operational efficiencies. Smith acknowledged the importance of cost-cutting measures, including automation to improve productivity, and highlighted the company's focus on efficiency gains across the value chain, from procurement and manufacturing to logistics and sales promotion. In terms of growth strategies, Smith confirmed that Libstar is open to strategic acquisitions that complement their existing business, taking advantage of potential buying opportunities in the current market conditions. Overall, Libstar's outlook for the year ahead reflects a cautious approach, anticipating modest organic growth while prioritizing operational excellence and strategic growth initiatives.