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Harare Bureau
CAPACITY utilisation at Victoria Foods, a division of CFI Holdings has significantly improved in the past six months following an injection of fresh capital into the business.

The company is now operating at an average capacity of 35 percent from about 10 percent, acting managing director Tawanda Chinoera said in an interview last Friday.

“We have managed to bring back almost 90 percent of our products in just six months and we’re distributing throughout the country,” said Mr Chinoera.

He the flour line was operating at more than 55 percent due to tight enforcement of the government policy that compels local bakeries to procure flour from local producers.

He said the re-entry of Victoria Foods into the market helped to stabilize flour prices as “our departure had left almost monopoly.” The company spent as much as $1,2 million on buying wheat from local farmers and was importing the commodity from Australia, South Africa, Russian and Ukraine to argument local supplies.

The maize meal business was “still low” but the performance was satisfactory, he said.

The performance of the snacks business was also satisfactory and the company was receiving some inquiries from potential customers in the region. “Already, there are some indirect exports taking place where some traders are buying from us and selling into the region. We are now focusing on those markets to generate extra business.”

Chinoera said the company was in the process of rebranding its rice package to make it more attractive. “All these efforts are aimed at regaining our market share,” he said.

The turnaround of Victoria Foods hit a snag early last year after a South African company, Grindrod Trading, which had agreed to buy 49 percent of the company withdrew its offer.

Grindrod had agreed to pay 3,2 million for the CFI shareholding and to provide Victoria Foods with $2,8 million loan to recapitalise. Grindrod was also going to sign various commercial contracts that would have resulted in Victoria Foods accessing a $12 million 90-day CMA grain procurement facility.

After Grindrod pulled out at the 11th hour, CFI had to pursue other ways of recapitalising the business.