Cash-rich Innscor Africa has spent approximately US$125m over the past two years in expanding capital projects across its various business units, board chairman, Addington Chinake has said.
In a statement accompanying full year results to June 30 2023,Chinake stated that the group continued to generate exceptional levels of free cash flow, which supported the numerous ongoing capital expansion projects across the entire business portfolio and enabled strong levels of cash returns to shareholders.
“Over the past two financial years, the group has deployed almost US$125m in expansion capital investment across its numerous business units. This investment programme has allowed for the establishment of new business units and products, enabled the expansion and modernising of existing manufacturing lines, extended existing product categories, and will ultimately enhance the overall manufacturing efficiencies and capabilities of the group as critical mass is reached,” Chinake said.
He added: “Much of this investment has recently been commissioned, or is in the final stages of commissioning, and in the period ahead we will deploy considerable focus and energy on ensuring these exciting new investments operate according to the necessary operating models, driving positive returns to shareholders.”
Chinake said the business models continue to undergo constant refinement to ensure we remain agile and relevant in a dynamic and complex operating environment.
“It is vital that our expansion programmes yield world-class quality products, and that our increasing manufacturing capacities across our business units translate into economies of scale, resulting in excellent pricing for our customers; we will continue to strive to make the lives of our customers better,” he added.
Profeeds division will increase its capacity and improve service delivery to the southern markets through a US$7m investment into a new Stockfeed facility in Bulawayo.
This facility is expected to be operational by the end of F2024.
The bakery division has recently completed the commissioning of its US$22m investment into a state-of-the-art, fully automated production line in Bulawayo and this investment has significantly improved loaf quality and is expected to enhance manufacturing efficiencies once all southern region production is migrated to this new facility.
Chinake said the installation of the new pasta line in Harare is on track, and the line is expected to be commissioned toward the end of 2023. The line will be the only large-scale pasta line in the country, and our objective is to meet the growing local demand for pasta.
“This represents, in our view, the exciting localisation of a key value chain, from the growing of wheat locally to the local production of pasta, which until now has mostly been imported,” Chinake said.