8th Mar, 2006: COLCOM is close to its stated target of growing a 4 000-strong cattle herd, which the pork producer will use to gain a larger share of the beef market.
Colcom spent $12 billion last year on 2 200 breeding cows, with chairman Joe Herman saying then that this was part of a long-term strategy by his company to exploit opportunities in the beef processing business.
In the company's interim financials to December, Colcom said it had managed to grow its herd further in the past year.
"The cattle breeding project remains on target with a total of 3 100 livestock units on the ground at the period end. Subsequently a further 800 livestock units have been purchased," Colcom said.
Colcom has ventured alone into the beef processing sector after its 2003 attempt to merge with Cattle Company Holdings fell through. The two companies rejected demands by the anti-monopoly Competition and Tariff Commission (CTC) that it would only approve the merger if Cattle Company's profitable auction business was excluded from the deal.
Colcom's two-year-old ostrich venture performed poorly in the last half year due to poor fertility caused by contaminated grower feed.
Stockfeed supply was adequate with deficits being met through an allocation from the Grain Marketing Board.
Colcom said: "To assist with stockfeed security, the group has once again entered into a joint venture to support contracted farmers with inputs for maize and soya. This scheme is expected to produce approximately one third and 85 percent of the group's cereal and soya requirements respectively."
Colcom, 76 percent-owned by Innscor Africa, made a turnover of $570 billion in the last half-year, with local sales contributing $473.8 billion, while exports accounted for $96 billion. The company said export earnings had been less than satisfactory, as the exchange rate had lagged behind inflation.
Basic earnings per share came in at $1 496.83, at the top end of market forecasts. Colcom had $77 billion in cash at the end of its reporting season after strong December sales.
