UAC Foods is a leading manufacturer and marketer of convenience foods in Nigeria. Its brands span a broad spectrum of the country’s food market, with specific focus on snacks, dairy products and beverages.
The snacks category consists of Gala Sausage Roll, which is the number one sausage roll in Nigeria, Funtime cup cake, Funtime coconut chips and Snaps puffed maize. The dairy category comprises the Supreme range of ice-cream products. Brands in the beverage category include Delite fruit juice, Swan natural spring water and the carbonated, fruit-flavoured Swan soft drink.
The intensely competitive trading environment of 2014 in a weakening macro economy continued into 2015, particularly in the snacks category, characterised by a number of new entrants and many existing competitors using price discounts to increase volume and factory throughput. Across the board, large distributors have increased their demands for more favourable terms of trade.
In tandem, cost increases from devaluation of the Nigerian naira have not been recoverable in the market, resulting in margin pressure. This is despite excellent progress in manufacturing efficiencies and general cost management.
Currency devaluation and the associated inflationary pressure in the second half of 2015 are expected to persist into 2016, indicating a more muted outlook for this business.
Empresas Carozzí is a leading branded food business in South America, based in Santiago, Chile. It also has significant manufacturing operations in Lima, Peru.
The company recorded a satisfactory performance at a consolidated level for the review period, with pleasing results from its core Chile division, driven by solid performances from its pet food, pasta, and biscuits categories. Disappointing performances were recorded by the agro-industrial division as a result of global pricing pressure and the Peru division due to weaker macro-economic fundamentals weighing on consumer sentiment.
Government changes in Chile in 2014, and their associated populist policy decisions, have muted the outlook for economic growth and consequent consumer demand in their core market. This is likely to persist into 2016.
The hallmarks of Carozzí’s sustained success include its exceptional innovation capability, off the back of strong number one or number two brands in the relevant categories, depth of market penetration and efficient manufacturing capability. The business is therefore well placed to continue competing effectively.
National Foods is a leading branded food company operating in Zimbabwe through an infrastructure of factories, depots and agencies. It recorded profit before tax of US$17,25 million, almost 21% below the prior year. The results were primarily driven by the poor performance of the Maize division, where volumes declined by 39% after a significantly improved 2013/14 local maize harvest forced prices down. Excluding this division, revenue grew over 5%, reflecting a strong performance from the Flour division. Capital expenditure for the year was US$5,7 million as initiatives to progressively upgrade the various manufacturing facilities continued.
The Zimbabwean economy again deteriorated during the period as rising unemployment affected disposable income. In addition, deflationary pressures continued, with the consumer price index recording food prices deflating at 3,3% for the year to June 2015. This, together with a weaker rand and the entry of several new competitors, heightened trading pressures.
Given the subdued trading environment, optimising the cost base will be a priority in the year ahead.
Oceana is a leading fishing company, listed on the JSE. Headline earnings for the year ended 30 September 2015 increased by 7% from the previous year, driven by a 17% increase in operating income.
Oceana completed two material acquisitions during the year, namely the fishing assets of Foodcorp Proprietary Limited and the US-based Daybrook Fisheries Incorporated. The Foodcorp acquisition was effective from 2 February 2015 and Daybrook from 30 June 2015.
Excellent growth was recorded by the canned fish and fishmeal operations, and commercial cold storage, aided by the newly acquired Daybrook division. This was offset by a decline in operating income from the Horse Mackerel division. Although relatively small, the lobster, squid and French fries business delivered a strong performance.