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CFI Expansion Drive in Full Swing

by 5m Editor
17 February 2012, at 1:34pm

ZIMBABWE - CFI Holdings has embarked on a massive expansion programme designed to improve capacity and efficiency of the group's operations. In an update of its operations, chief executive Mr Steve Kuipa said the expansion programme was "in full swing".

According to AllAfrica, it consisted of the installation of four environmentally-controlled housing for broilers at its Glenara Estates and the refurbishment of Victoria Foods.

Commissioning of the environmentally-controlled houses at the 2 000-hectare estate is expected at the end of March.

"We got lines of credit of about US$3.8 million and of that amount, we are spending US$2 million on constructing broiler houses," he said.

"About US$1.4 million will be spent on upgrading the Victoria Foods plant while the remainder (US$400,000) will go towards upgrading Hubbard hatchery in Beatrice."

CFI is involved in poultry, milling of stockfeeds, maize and flour, manufacture and distribution of agri-chemicals, farming and retail. The environmentally-controlled houses will have capacity to keep 160 000 birds per six-week cycle. The current housing facilities are open-sided with capacity of about 460,000 birds.

Managing director for Crest Poultry Group, a division of CFI, Dr Tapera Mpenezi, said studies have shown that mortality rates in conventional houses were higher than those in controlled houses.

"On average, mortality rates in open-sided housing average between eight and 10 per cent against between 2 per cent and 3 per cent in for environmentally-controlled housing," he said.

"The new environmentally controlled housing facilities will be computerised and this should improve efficiencies and productivity."

Efficiency at its slaughtering division, Suncrest Chickens, is being affected by ageing equipment and there was need to upgrade the plant.

Plans are underway to set up a second abattoir at Glenara Estate. The group is also targeting to increase capacity at Hubbard through upgrading the hatcheries.

The company is looking at increasing capacity to about 500 000 day-old chicks from about 350,000.

The current market share for chickens is stable as there were fewer imported products coming through.

But there have been reports of smuggled chickens finding their way into the informal markets.

Demand for the table eggs remains high, with the company supplying 35 per cent of the country's table eggs. At Glenara Estates, the group planted about 712 hectares of commercial maize which would guarantee Agrifoods, CFI's stockfeed operations a three months supply.

More than 300 hectares of soya beans were also planted at the estate.

Mr Kuipa said the group would consider doubling the hectarage next season to reduce the cost of importing soya beans and maize.

"In future, we will also look at backward integration through contracting farmers in maize and soya beans production," said Mr Kuipa.

The milling division is seen as a growth opportunity, through value addition in bread-making and biscuit manufacturing divisions.

Competition remains high on flour products due to the presence of imports. Victoria Foods is currently operating at 25 per cent capacity.

CFI operates two mills in Harare and Gweru with a capacity of 4 500 tonnes a month each for maize and wheat.

Mr Kuipa said while the group recapitalisation programme was progressing well, there was need to bring in new strategic partners, particularly in poultry and milling divisions.

He said the group would further raise capital through asset disposal. Assets to be sold include CFI's 14 per cent stake in Windmill, some agricultural land around Honeydew farm and the disposal Dore & Pitt.