Tanganda expects to reap the benefits of its investments in new equipment for its Mutare packaging facilities.
After delisting in 2008 following the disastrous merger with Kingdom Financial Holdings, Meikles Africa Limited, and Cotton Printers, The Tanganda Tea Company relisted on February 4th, 2022.
Since then, the company’s operations have expanded away from coffee and tea products in favour of horticulture items like macadamias and avocados, resulting in some structural modifications.
“The company’s decision to invest in new machinery at the packaging factory in Mutare in line with its value addition strategy has resulted in the realization of factory conversion efficiencies,” group chairman Herbert Nkala said in a statement accompanying the results for the 12 months ended 30 September 2022.
“This investment is expected to increase volumes in both the local and the regional market.”
To coincide with its agricultural season, the company moved its fiscal year end from March to September in 2021. The financial statements that are given cover the six-month period ending September 30, 2021, and the twelve-month period ending September 30, 2022.
Nkala said the approach of diversifying operations has produced observable advantages and will be a focus in the ensuing years.
“Yields of avocado and macadamia are expected to increase with enhanced maturity profiling of plantations over the next three to five years,” he said.
“The company will enhance mechanized efficient farming practices in order to maximize production output.”
On operations, bulk tea exports rose 11% to 7 125 tonnes from the prior season’s 6 392 tonnes. The average export selling price firmed up slightly to US$1.42 per kg from US$1.39 per kg in the previous year.
Avocado fruit exports increased by 7% from 4 001 metric tons the previous season to 4 268 metric tons this season.
“However, the average export selling price of US 44 cents per kg was 38% lower than US 71 cents per kg in the prior year as a result of the oversupply on the European market by Peru, compounded by the Covid-19 pandemic that reduced volume uptake by the European hospitality sector,” he said.
“As the world moves out of the pandemic we expect that both export volumes and selling prices will firm up. 49 additional hectares of avocado plantation were established during the financial year bringing the total hectares under avocado to 497 hectares.”
Due to the dry weather that occurred during the season, macadamia nut production of 1 076 metric tons was nearly equal to the previous season.
“The macadamia market is shifting to kernel from the traditional nut-in-shell market, resultantly exports declined by 16% from 800 tonnes in the prior year to 670 tonnes. Global prices of nuts declined from an average of USD 5.12 per kg achieved in the prior year to USD 3.26 per kg in the current year,” he said.
“To mitigate these developments, the company has identified alternative markets and strategies that include exploring value addition options.”
Coffee exports of 96 metric tons were 14% higher than the previous year’s total of 84 metric tons. The average export selling price of USD 6.56 per kg remained slightly firmer than prior year price of USD 6.50 per kg.
Packed tea volumes into the regional market recorded a 57% growth from 218 tonnes in the prior year to 343 tonnes. Overall packed tea sales volumes of 1 994 tonnes were 9% below 2 191 tonnes in the prior year.
“Logistical delays arising from global supply chain disruptions resulted in a lower local packed tea order fulfillment percentage, especially in the peak winter season but this has since improved significantly,” he said.
“Liquidity challenges affecting disposable income in the economy further impacted the level of sales volumes. During the fourth quarter, the company introduced Makoni, Resurrection and Rosella herbal infusions onto the market in response to customer preferences.”
As for the group’s financials, its revenue for the year increased by 7.7% to $12.22 billion from $11.35 billion. Profit after tax improved to $583 million from a loss of $318 million in the previous year.
The board declared a final dividend, number 2, of 0.06 US$ cents per share – Harare