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Dairibord props up subsidiary

Chris Goko

DAIRIBORD Zimbabwe Ltd (Dairibord) has transferred its transport assets to newly-created subsidiary NFB Logistics (NFB) to reduce “idle-time” on product distribution and to generate ex

tra cash by using excess capacity to do external jobs.

Group corporate services director Busi Chindove said NFB’s creation in October 2003, was also meant to exploit group synergies and enhance savings by running the company viably while competing with external transport providers.

“The initiative (NFB’s creation) was designed to derive savings and value from… using capacity excess to group needs to generate revenue from external customers,” Chindove said.

NFB is a successor to Cluxmac (Private) Ltd and is solely focused on distribution logistics and infrastructure. It does not include any production assets, Chindove told businessdigest.

Since inception, she said, they had reduced external vehicle hire to cut costs.

A raw milk processor, Dairibord also makes and sells other nutritious foods and beverages — lending itself well to the transport division’s name — NFB.

Its product range includes the Natural Joy fruit juice and mineral water brand.

While the main fleet comprises traditional Dairibord trucks and Lyons vehicles, significant investment has been made in refrigerated trucks.

Said Chindove: “As part of the overall business plan, investment will be channelled towards focused fleet refurbishment and expansion to ensure the correct capacity and configuration to meet the needs of NFB’s customers and unlock value for shareholders.”

It was not possible to ascertain how many new refrigerated units NFB had acquired, but capital outlays at group level for the year to December 2004 amounted to $14 billion.

The capital expenditure also helped grow the company’s net current assets to nearly $290 billion.

Dairibord, emerging with three autonomous divisions, namely Dairibord Malawi, Lyons and NFB following a “concentric diversification” programme in 2004 to enhance profitability, says its Malawi subsidiary will keep using its own fleet for distribution purposes.

Dairibord is listed on the Zimbabwe Stock Exchange and recently bought into confectionery maker ME Charhons.

Chindove said NFB was tasked with providing the group’s manufacturing divisions with logistical support and did “not envisage farming out its assets”.

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