- Goldstar Sugars reported a 0.4% decrease
- The sole supplier of raw sugar increased its prices significantly
- Country Choice Foods division ramped up production by 16%
ZSE-listed sugar maker, Star Africa Corporation’s Goldstar Sugars has incurred nosediving performance for the 3rd quarter ended 31 December 2022 due to recurrent power outages and supply challenges. Goldstar Sugars reported a 0.4% decrease in volumes, the first dip since the post-COVID-19 pandemic period. During the third quarter to FY2021, Goldstar Sugars production and sales volumes improved by 65% and 102%.
Due to a 0.4% volumes decline, sales for the unit fell by 0.2% against the comparable period.
During the period from October to December 2022, the nation experienced erratic power supplies of up to 19 hours a day, curtailing business operations. The power situation in Zimbabwe remains anaemic with the failure of the commissioning of Hwange’s Unit 7 on the 31st of January 2023; hence, the need for the company to rely more on alternative power sources to increase production.
In an effort to counter the power shortage, the company installed an 11 kVA dedicated electricity line, procured a 1,000 kVA generator, and installed electrical cables. This expenditure was topped off with the completion of an overhaul program for two of its five boilers.
However, deficits for the quarter were narrowed by the company's Country Choice Foods division that ramped up production by 16% while sales volumes registered an 8% uptick. Growth was underpinned by competitive stand in mass marketing and the commissioning of an automatic syrup filling machine that positioned the unit’s products among the most affordable in the market.
The company’s future remains threatened with much operational uncertainty as the business is already has been already swimming the hot soup prior publication of Q3 results. This came into effect as the sole supplier of raw sugar increased its prices significantly, resulting in the company’s products being uncompetitive.
The company, however, is optimistic about its engagements with the Ministry of Industry and Commerce, with a view to agreeing to price and trading condition adjustments.