HomeNewsGovernment settles Seed Co debt

Government settles Seed Co debt

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GOVERNMENT has paid Seed Co $9,1 million for agricultural input obtained last year and has promised to pay the balance by the end of June. Government owes Seed Co $13,7 million.

Report by Tarisai Mandizha

Speaking at the company’s analyst briefing last week Seed Co group chief executive officer Morgan Nzwere said to date government has cumulatively paid $9,1 million and the balance of $4,6 million is expected to be paid before June 2013.

“The challenge is that payments are coming in slowly. The will and desire to pay is there, but as you all know there are liquidity challenges in the market,” said Nzwere.

He said the liquidity constraints were not only affecting companies, but governments as well.

“Government pays slowly, but they always pay,” he said.

Nzwere said other related inputs programmes in Zimbabwe owed the company $11,2 million on current year sales which are expected to be paid by September 2013. In the region, Seed Co is owed $8 million in Zambia and $2 million in Malawi.

Nzwere said in other countries Seed Co expected no payment problems from both government and other traders.

Seed Co recorded a 34% decrease in after-tax profit to $12,6 million for the year ended March 31, 2013 attributed to a decline in seed uptake.

Revenue declined by 6 % to $111 million for the full year to March 31.

Nzwere said government and related input programmes were reduced in the period under review with seed intakes declining by almost 47% as compared to the prior year. He said over the last decade these institutions had been the major customers for seed.

“Very late rains which only started falling just before Christmas were already too late for any effective planting. Rains are always a major catalyst in terms of the small scale farmers buying their seed requirements,” he said.

Nzwere said sales volumes for maize declined by 3% to 34 667 tonnes for the year ended March 31 2013 from 35 678 in 2012.

Winter cereals declined by 49% to 2 758 from 5 450 in 2012, while cotton declined by 2% to 11 867 from 12 148 and seed beans increased by 45% to 7 581 and 5 221 last year. He said the overall sales volumes were 10% lower than the comparative period mainly due to a number of challenges which includes late rains in the main markets, reduced government related input programmes and also slow uptake of cotton seed due to price disputes in the industry.

The company released a total of 16 new products in various markets, of which seven were maize, five (soya beans), three (wheat) and one variety in cotton.

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