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Tiger Brands Limited Integrated Annual Report
2014
Performance review
Noel Doyle
Business Executive: Grains and Nigeria
enhancements after the successful completion
of a capital project at Randfontein mill were
well received by consumers.
The Sorghum and Maize Breakfast and
Beverage business recorded the lowest level of
operating income growth within the segment.
Very strong volume growth in both Ace Instant
and Morevite Breakfast offerings were offset by
volume declines in Sorghum Beverages and
Mabela, both of which were significantly
impacted by strikes in the platinum belt.
Other Grains
The Rice business recorded a marginal
improvement in operating income for the
year, having achieved volume growth in the
second half following a first half decline. The
competitive environment has continued to
intensify and the benefits of reduced Thai rice
pricing over the past year have had to be
passed on to customers in order to sustain
volume levels.
The Pasta business recorded a very pleasing
increase in operating income for the year.
The correction of pricing into the second half
of the year did see a significant slowdown in
volume growth but corrected the decline in
operating income reflected at the half year.
Profitability is now at satisfactory and
sustainable levels.
The Oats business produced a pleasing level
of operating income growth, driven by a
strong volume performance.
Outlook
The second half results whilst pleasing at an
operating income level reflected a slowdown
in volume growth when compared with the
first half. All indications are that levels of
consumer confidence and demand remain
muted, whilst market share gains achieved
are coming under pressure as competitors
respond. However, despite ongoing cost
pressures, particularly on imported
commodities, labour and administered costs,
we remain cautiously optimistic that further
positive momentum in both volume and
operating income can be sustained albeit at
levels considerably lower than those reported
for the current year.