SUGAR processor starafrica corporation says it is geared to take opportunities in the export markets as well as consolidate its market share in the region.
The company said the strategy will be supported by improved production efficiencies following refurbishment of machinery, among other factors.
In line with this, chairman Mr Joe Mutizwa said exports into the Botswana market would also commence during the current financial year.
This also comes as the group managed to retire almost all its legacy debts while post year end, its unit Goldstar Sugars Harare (GSSH) was also given full authorization by The Coca Cola Company (TCCC) for bottler ingredient supply to the whole of Africa.
This, Mutizwa said, will open new markets for GSSH and pave the way for sugar specialty products to be exported into the region and beyond.
“Focus will be directed at growing the company’s footprint in the region and beyond in the ensuing financial year by tapping more into the export market buoyed by improved production quantities and the TCCC full authorization to supply bottler ingredients to TCCC’s entire Africa operating unit.
“The group envisages a resumption of exports to the Botswana market in the 2022 financial year which will increase revenue and foreign currency earnings.
“The group has expunged the legacy liabilities and is now on a renewed drive to re-tool its operations, attend to plant downtime through replacement of critical machinery and grow its market share locally and in the region,” said Mutizwa in a statement accompanying the group’s financials for the year to March 31, 2021.
According to Mr Mutizwa, a phased refurbishment of the dry section of the sugar refining plant (Secondary Plant) will be accelerated in the ensuing year, with work having commenced on replacement of centrifugal machines, rehabilitation of the raw sugar warehouse and procurement of an effluent treatment plant using internally generated funds and foreign currency acquired from the Reserve Bank of Zimbabwe’s auction system.
This is expected to yield significant efficiencies in the operations of the plant and reduce the plant downtime that negatively impacted production in the 2021 financial year.
Said Mr Mutizwa: “A comprehensive capital investment strategy and equipment maintenance plan is now in place and will be implemented at an accelerated pace now that the business has returned to viability.
“This will have a positive impact on plant availability which will improve productivity and profitability in the ensuing year.”
Meanwhile, profit for financial year 2021 went down 41 percent to $109 million from $185 million in the prior year.
According to the sugar processor, a downward adjustment in fair value on investment properties caused by loss of value of properties in the market in real terms impacted negatively on group profitability.
The Group also incurred a monetary loss of $163 million caused by depreciation of the value of the monetary assets it holds.
Total revenue jumped 23 percent to $5, 08 billion compared with $4, 12 billion realized in the prior year.
Mr Mutizwa also bemoaned the challenging business environment for the year under review, which was mainly shaped by the effects of the Covid-19 pandemic, particularly the national lockdowns which caused inevitable business disruptions for some parts of the year.
This, coupled with plant breakdowns and a fire incident at the raw sugar warehouse adversely affected production at GSSH which saw production decrease 9 percent to 59 571 tonnes from 65 568 tonnes of refined sugar.
The business unit sold 60 386 tonnes against 63 993 tonnes sold last year. The 5, 6 percent drop in sales volumes is largely attributable to interruptions to production due to Covid-19 related factors and plant downtime.
Sales volumes at Country Choice Foods (CCF) increased by 19 percent while the properties business recorded a 54 percent increase in turnover to $20,7 million from $13, 4 million recorded in prior year on improved occupancy levels.
Associate, Tongaat Hulett Botswana (THB), posted a profit after tax of $208,6 million of which the group’s share was $69, 5 million after converting the earnings into Zimbabwean Dollars at the official exchange rate as at 31 March 2021.