Dual strategy paying off: starafricacorporation

Harare – Sugar manufacturer starafricacorporation says it has progressed well on its dual strategy of expanding it local reach while also moving into exports market.

In a statement accompanying its financial results for the half year ended September 30, 2018 the Group said this has been achieved through introduction of new products while expanding ranges of existing products and a breakthrough in exports.

“The Country Choice Foods unit has been the focus of the products development thrust which has seen the introduction of honey, sweeteners and four new flavours for the syrups in the period under review.

“The new products, in spite of some delays in roll out, contributed 4 percent of the total tonnage sold at CCF and the plan is for new products to contribute at least 10 percent of the volumes sold within the next 12 to 18 months.”

 In the period under review, starafrica said exports started in earnest in August 2018 with sugar exports to Tongaat Hulett Botswana and the volumes achieved contributed 3 percent of the volumes for the period under review.

“There is exploratory marketing work focussed on the Central Africa Region which is expected to start yielding tonnages within the second half of this financial year”.

During the period, Goldstar Sugars Harare (GSSH) produced 35 791 tonnes of refined sugar compared with 31 023 tonnes produced in the prior year comparative period and sold 35 697 tonnes against 30 328 tonnes sold in the comparative period.

“The increases in production and sales volumes against prior year were 15 percent and 18 percent respectively. The production volumes reflect continuous interventions to support the plant post completion of the primary plant upgrade.

“The sales volumes were as a result of sustained marketing efforts and improved confidence in the company’s product supply and quality capabilities, especially in the Industrials segment. The sales also included sugar exports that began in August 2018.”

The plant was recertified by The Coca-Cola Company (“TCCC”) as well as Food Safety certification under FSSC 22000 series. The certifications enable the company to supply bottler grade sugar to TCCC franchisees on the local and international markets.

During the same period, Country Choice Foods’ (CCF) sales volumes at 814 tonnes were 19 percent higher than the prior year.

The contribution of new products climbed to 4 percent of total CCF volumes. The unit’s EBITDA contribution for the period under review was $0.4 million against $0.3 million achieved in the prior year.

In the period under review, the associate company in Botswana, Tongaat Hulett Botswana performed significantly above prior year levels as it achieved a profit after tax growth of 63.6 percent to $1.8 million compared to the prior year.

In the property business, EBITDA doubled to $0.2million as a result of improved occupancy in the current period, costs containment and reduction of some major repairs and maintenance costs in the prior year which were of a once-off nature.

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