Source: The Herald – Breaking news.
Michael Tome Business Reporter
TSL Limited, a Zimbabwe Stock Exchange (ZSE) agriculture-focused company, has assumed 100 percent ownership of Agricura after buying out minority shareholding in Agricor (Private) Limited, its previous co-owner.
Established in 1965 Agricura is one of Zimbabwe’s leading providers of crop chemicals and veterinary products.
It provides a comprehensive range of crop chemicals that include grain protectants, herbicides, and fertilisers.
Under veterinary chemicals and pest control services, Agricura provides and distributes insecticides, fungicides, fumigants, rodenticides, nematicides, as well as human health remedies.
Speaking at the analyst briefing for the 2023 financial year, TSL chief executive Mr Derek Odoteye said the acquisition is expected to create increased flexibility and customer reach. “TSL bought out a minority in Agricura, and we are now a 100 percent shareholder in the company. We did that with a vision to increase flexibility for the business to expand and deepen its product offering to the market.
“That flexibility will allow us to expand and deepen the product offering,” said Mr Odoteye.
According to TSL’s chief executive, Agricura is the next big business in the group’s line of business.
“A lot of the other commodities struggled with margin pressure and we noticed that we had very good performance in our animal health remedy space, and the new grain contents that we introduced to the market,” he added.
Agricura recorded a mixed volume performance for the year to October 2023 as some product lines, particularly the locally produced animal health remedies and new grain protectants performed better than in the previous year on the back of product availability while other product lines’ volumes lagged due to depressed demand.
Overall, the group recorded a 159 percent revenue increase to $172 billion, in inflation-adjusted terms, on the back of good volume growth across business units ahead of the prior year.
The group ended the year with an 89 percent growth in operating profit attributable mainly to tobacco-related businesses.
TSL Limited chairman Anthony Mandiwanza said the farming operations produced a superior quality of tobacco and achieved improved yields and price per kg on tobacco compared to the previous year.
This also was spread to other crop varieties produced during the period.
“Favourable yields were achieved on soya beans and commercial maize although wheat production declined due to electricity availability challenges. The new banana plantation came into production in the year resulting in increased volumes,” said Mr Mandiwnza.
The group’s performance was driven mainly by tobacco-related services after Tobacco Sales Floors (TSF) registered a 125 percent increase in handled tobacco to 51,9 million kilogrammes ahead of 23 million kg in the prior year.
As such, TSF continued to hold the largest market share in the independent auction segment at 65 percent.
TSL indicated that the positive results were in large measure, attributable to a larger national tobacco crop, successful decentralisation of operations, and the acquisition of new customers.
Under the packaging segment, Propak Hessian saw volumes increase 32 percent ahead of the prior year owing to stock availability and a larger tobacco national crop size.
This was aided by tobacco paper volumes which closed the year 27 percent ahead of the prior year, as the market continued to respond positively to the locally coated paper.
Logistics operations saw a 96 percent increase in tobacco handling volumes due to an increase in the customer base. General cargo handling volumes, however, declined 19 percent due to reduced fertiliser volumes.
Volumes in the FMCG division increased by 32 percent on the back of the new business, while Premier Forklift volumes surged 16 percent ahead of the prior year as fleet on hire grew by 32 percent.
Under the real estate division TSL occupancies, returns, and the level of voids remained satisfactory due to improved demand for warehouse space.
The group indicated that it will continue to pursue key strategic initiatives in line with its “moving agriculture” strategy.
“Several investments are lined up to scale up manufacturing, expand the capacity of the different business units, and improve efficiencies to deliver a superior offering to the marketplace across the agriculture and mining value chains.”
TSL said the focus will remain on enhancing earnings, returns on invested capital, and long-term value proposition to strengthen financial positioning.
However, the 2023/24 agricultural season is expected to have lower-than-normal rainfall which will have an impact on the performance of some of the Group’s business units.