Aico incurs $27m loss


HARARE – Listed agro-focused concern Aico Africa Limited (Aico) remains in the red after incurring a $27 million loss in the half year to September 2013 due to depressed sales volumes.

During the period under review, sales volumes slumped 23 percent with the group’s revenue declining six percent to $50,9 million from $54 million recorded in prior comparable period.

Investment income shrinked to $93 million from $215 million.

AICO — currently courting foreign investors — also attributed the subdued performance to declining national crop size uptake.

“Seed cotton crop intake fell to 34 500 tonnes driven by a very low national crop size. Market share fell to 24 percent from 42 percent last year,” it said.

Over the years, Zimbabwe’s agriculture activity has significantly dampened due to lack of funding and poor farming management coupled with a shift in weather patterns.

Aico noted that the on-going agro funding initiatives will be critical in revitalising the fortunes of the business.

Last month, Aico announced that it could receive $48 million for the sale of its 20 percent share holding in Seed Co to a London-based firm Limagrain UK (Limagrain).

Limagrain UK hopes to gain a foothold in southern Africa seed market through the acquisition of a stake Seed Co. In the region, Seed Co already has established operations in Malawi and Zambia as well as Tanzania in East Africa.

“With the fundraising proceeds earmarked predominantly for the Cotton Company of Zimbabwe Limited, we anticipate recovery and a rebounding of this business going forward,” said Aico.

With the proceeds, Aico will be able to restructure its existing debt in its subsidiaries and Seed Co on the other hand will get a technical partner.

Seed Co — Zimbabwe’s largest seed producer — develops and markets certified crop seeds, mainly hybrid maize seed, but also cotton seed, wheat, soya bean, barley, sorghum and ground nut seed.

Most of its hybrid and non-hybrid cereals and oil crop seed varieties are proprietary, having been developed and bred at the company’s research stations through market-oriented research and breeding programmes.

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