Starafrica Corporation says the company will continue to tighten its cost mitigation strategies so as to improve productivity and operating profitability across its business units.
The Zimbabwe Stock Exchange listed firm released its trading update for the third quarter ending 31 December 2022 barely after shutting down its Goldstar sugar refinery in Harare.
This comes after its sole supplier of raw sugar increased its prices significantly, resulting in the company’s products being uncompetitive.
“The company has engaged the supplier and the Ministry of Industry and Commerce, with a view to agreeing to a price, as well as trading conditions that are viable and sustainable,” the company said.
Granulated white sugar output levels at Goldstar Sugars were 0.4% lower than they had been during the comparable time the year before.
“Power and steam supply constraints were the main causes of the marginally reduced throughput, as they negatively impacted plant uptime.”
As a result, sales volumes decreased by 0.2% from the previous year due to lower manufacturing.
“Notably, the unit completed an overhaul programme of two of its five boilers. In addition, the business installed an 11kVA dedicated electricity line, procured a 1,000kVA generator (for controlled plant stoppages, following power cuts) and electrical cables to mitigate power supply challenges.”
Country Choice Foods launched new product lines, such as caramel popcorn, baking powder, and cocoa powders, as well as automatic syrup filling equipment and a more aggressive pricing strategy.
“The aforementioned initiatives positioned the unit’s products among the most affordable in the market, resulting in notable increases in production and sales volumes of 16% and 8%, respectively, compared to prior year, ” it said.
The period was characterised by inflationary pressures and exchange rate movements.
“Currency volatility has resulted in increased operational costs for businesses and reduced consumer spending,” reads the trading update – Harare