SUGAR producer starafricacorporation experienced a turnover increase of 30% for the financial year ended March 31, 2023, with the surge largely driven by the strong demand for its products during the year.
The turnover increased from ZWL$38,5 billion recorded in the prior year to ZWL$50,1 billion.
According to chairperson Rungamo Mbire, the group’s operating profit shrunk by 93% from ZWL$5 billion in the prior year to ZWL$400 million owing to an increase in raw sugar prices and operating costs.
“Increasing global inflationary pressures have resulted in a spike in the costs of imported chemicals, packaging and refinery spares,” Mbire noted.
During the period under review, sales volumes of granulated sugar produced by Goldstar Sugars were stagnant, having been 82 500 tonnes sold in the prior year to 82 321 tonnes.
“This was on the back of pressures from imports after promulgation of Statutory Instrument 98 of 2022.
"The Ministry of Finance and Economic Development later suspended the duty on the importation of sugar into the country,” Mbire said.
He added that production volumes were lower due to a shortage of raw sugar and power cuts.
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“However, the production was adversely affected by raw sugar stock outs and power outages.
"This resulted in the production volumes reducing by 6%, from 82 399 tonnes in the prior year to 77 270 tonnes during the year under review.”
The unit will focus on the refurbishment and replacement of the critical items of plant and machinery to improve plant availability and, therefore, the refinery’s throughput in terms of both quantity and quality of granulated white sugar.
Mbire also noted that the group certification by the Coca Cola Company enabled it to expand its supply routes in the Southern African region.
“The plant continued to be certified by The Coca Cola Company (TCCC) and maintained its Food Safety Certification under the FSSC 22000 series.
These certifications enable the group to supply sugar to TCCC franchisees in the Southern African region and beyond.”
He said Country Choice Foods products continued to dominate the market on the back of competitive pricing.
This positioned the unit's products among the most affordable on the market. Consequently, sales volumes increased by 9% from prior year's 1 879 tonnes to 2 048 tonnes.
Revenue performance for the properties business improved significantly with ZWL$337,5 million of rental income being recorded compared to ZWL$162,2 million in the prior year.
The group's associate, Tongaat Hulett Botswana's revenue improved significantly at ZWL$958,1 million, with the company's share being ZWL$319, 4 million after converting the earnings to Zimdollars at the Reserve Bank of Zimbabwe auction exchange rate as of March 31, 2023.
“The company looks forward to the government reinstating duty on imported sugar, a development which will impact positively on the local sugar industry,” Mbire said.
The company will continue to tighten its cost-mitigation measures to improve the operating profitability of both the refinery and the sugar specialties unit.
