Sefalana Reports Strong Performance Despite Import Restrictions 

  • Botswana businesses generate P306m in PBT for year ending 2024
  • Consumers yet cautious but more frequents visits to stores reported
  • Import bans blamed for certain shortages and price increases
  • Foods Botswana contributed 4% to Group turnover and 14% to PBT

GAZETTE REPORTER

Sefalana’s Botswana-based business units, which make up about two-thirds of the company’s operations, generated P306 million in profit before tax (PBT) for the fiscal year ending in 2024, a significant rise from P259 million the previous year.

The company’s Managing Director, Chandra Chauhan, credited the increase to strong performance in the trading of consumer goods and the manufacturing sector.

“We have noted the trend where consumers are returning to more frequent visits to stores, and basket sizes have begun to increase,” Chauhan said. “However , the consumer is still somewhat cautious and tends to focus more on value packs, necessities, and private label products, rather than luxuries. This has had a negative impact on gross margins. The desire for a one-stop shop is very much apparent and we have responded accordingly through range extension across the Group.”

Chauhan also highlighted the impact of government-imposed import restrictions on certain confectionary, fruits and vegetables. These restrictions have now been extended to December 2025, with additional lines introduced in June 2024.

More farmers

“These restrictions have resulted in supply shortages and higher prices for our customers,” Chauhan said. “This will likely continue until the agricultural sector is able to meet local demand. However, there have been improvements during the year, with more farmers entering the market.”

Despite these challenges, Sefalana has managed to expand its operations.

As at the end of the fiscal year, the company’s fast-moving consumer goods (FMCG) business in Botswana consisted of 125 stores, including 4 hyper stores, 25 cash and carry stores, 34 supermarkets, 56 liquor outlets, 5 convenience stores, and 1 catering outlet.

This reflects an increase from 123 stores at the end of April 2023, excluding its 3 fuel stations.

Govt feeding schemes 

Sefalana’s manufacturing arm, Foods Botswana (Pty) Limited (FB), contributed 4 percent to group turnover and 14 percent to PBT for the year.

The company’s profitability in this sector, Chauhan explained, is highly dependent on government orders for various feeding schemes and the availability of raw materials.

“We anticipate an increase in government spending next year, particularly with the announced extension of drought relief feeding schemes,” he said.

FB successfully supplied the government tender for nearly the entire 52-week period, following its award of two-thirds of the national tender in May 2023.

Additional volumes

Chauhan also noted that FB exceeded its initial commitment, delivering additional volumes after the government requested more supplies when other tenderers failed to meet their obligations.

“We are pleased to report that additional volumes were supplied during the year, following the failure of other tenderers to deliver on their required volumes,” he said.