By Owen Mandovha
LOCAL companies are benefiting from the improving market and economic conditions as shown by the impressive financial performance and trading updates that have been released by prominent manufacturing entities.
Improving economic and market conditions continue to lift and boost operations in the manufacturing sector.
Sugar refining giant Star Africa whose fortunes plummeted due to mounting debts has turned a corner and the year 2021 was profitable for the Zimbabwe Stock Exchange-listed sugar concern.
The company notes in its latest trading update that local demand was so robust to an extent that all production was absorbed by the local market.
A hefty 46% percent jump in sales was recorded during the year 2021 from 26 959 tonnes to 39 294 tonnes therefore inflation-adjusted revenue rose by 38% to 3.92 billion Zimbabwe dollars compared to the same period last year.
These fortunes were not only restricted to the sugar industry but also extended to the brick manufacturing sector, with Willdale posting an impressive sales performance for the year 2021 after a 32% rise in sales volumes.
The company attributed this glowing trading picture to the heightened construction activity currently driven by government-initiated housing projects as well as individual cluster projects throughout the country.
The company is investing 1 million United States dollars in capital expenditure to meet the growing demand for bricks as the construction wave is expected to continue in 2022 and spill into 2023 going forward.
Commenting on these results economist Dr Prosper Chitambara said they indicate a growing economy.
“Barring any challenges affecting business, it is quite clear that the overall economy has stabilised. Last year the economy grew by over 5% and that relates to the impressive agricultural season that we recorded as well as increased manufacturing capacity. So these results by local companies indicate a growing economy and when companies post such results it is not surprising at all.”
Zimbabwe National Chamber of Commerce Vice President Mike Kamungeremu noted that despite some challenges about exchange rate disparities, Government policy interventions have come in handy in dealing with the yesteryear hurdles that threatened industry viability.
“We indeed commend the business community for the resilience shown during these difficult times. You saw that demand is growing in this environment and the multi-currency system has enabled businesses to receive in foreign currency and that has reduced forex demand on the auction system. The results of the Willdale are very encouraging as with those of Star Africa which is blossoming in the local market after a lengthy difficult spell.”
Delta Beverages also released its trading performance for the year 2021 which showed a remarkable improvement as the beverages giant recaptured market share lost in previous years while thanking the multi-currency system for helping to raise foreign currency internally to finance key raw material imports.
The company intends to spend over 10 million United States dollars in 2022 on new product lines and expansion as market conditions improve.