Sefalana Holdings said raw material shortages for the production of milk in the region have resulted in the slowdown in production volumes.
The listed retailer produces milk in 500ml and one litre cartons under the Delta Fresh brand.
Therefore, the group bemoanded that insufficient milk supply has affected the production of milk for local manufacturers. In his comments on the retail group’s financial results for the six months ended October 31, 2020, managing director, Chandra Chauhan said the situation is worsened by their suppliers going into beef production.
“We are in constant discussions with our suppliers in South Africa in an attempt to increase procurement, but due to a reduced number of dairy cows during the pandemic, where focus was placed by farmers on meat production rather than diary,” he said.
He said even though there appears to be a catch-up underway to reinstate the dairy cow production population, this will take some time as he anticipates shortages to continue into early 2021. The local dairy sub-sector is still at an infancy stage, with the annual local milk production accounting for only 15% of the national demand, allowing the country an opportunity to develop. As of 2019, local milk production stood at
According to the MD, their focus is also on building the Delta Fresh brand which has increased by over 30% year-on-year and ensuring distribution is maximised.
Delta milk can be accessed in most retailers across the country. Chauhan added that the group’s beverages plant will come onstream later i n the year.
“Our bottled water and fruit juice plants were expected to be in operation by September 2020, but had to put on hold on all non essential capital expenditure for atleast a nine month period. As a result these plants are only expected to be in place in late 2021,” he said.