ZIMBABWE Stock Exchange (ZSE)-listed horticulture firm, Tanganda Tea Company, says sustained market diversification to increase exports registered 50 percent growth in packed tea export volumes into the region.
Tanganda remains the largest producer, packer and distributor of tea products in Zimbabwe and distributes to wholesale and retail outlets on both the domestic and regional markets.
In its third quarter trading update, the firm stressed the importance of market diversification noting that demand for its products was strong locally and in regional markets.
“The demand for our packed tea products remains firm both on the local and regional markets and focus is on sustained diversification of the market,” reads part of the update.
However, the firm bemoaned a cocktail of issues for low sales, which include supply side problems, among them packaging supply and power outages.
Zimbabwe’s agriculture industry is under pressure from the effects of El Nino at a time when international commodity prices are subdued.
In the period under review, the bulk tea production yield of 7 293 tonnes affected by the late onset of the rains in the first quarter of the year recovered, and was in line with prior year production.
Export volumes declined by nine percent to 4 504 tonnes from 4 959 tonnes achieved in the previous year due to the timing of sales as production was more concentrated in the third quarter.
Packed tea volumes of 1 303 tonnes were 11 percent below 1 459 tonnes achieved in the previous year.
“Cumulative variance against the prior year narrowed in the third quarter due to a combination of packaging supply constraints and working capital management.”
Macadamia production volumes grew by 61 percent to 1 487 tonnes from the prior year’s volumes of 921 tonnes as yield per hectare improved with the plantations’ maturity profile.
It said a 33 percent decline in the nut in shell exports from 735 tonnes achieved the prior year to 494 tonnes was due to the delayed start of the marketing season.
Company revenue for the quarter under review of US$3,4 million was in line with the previous year, while revenue for the nine months ended June 30 of US$14,5 million registered a five percent decline against US$15,3 million achieved in the prior year.
Profit after tax declined by eight percent to US$1,2 million from US$1,3 million achieved in the previous year.
Tanganda said the impact of the ZiG currency, as well as fiscal and monetary measures, are expected to sustain macro-economic stability in the short term, while the medium to long-term impact can be ascertained after policy refinements.
“The Company is optimistic that it has put in place mitigatory strategies to enhance process efficiencies and manage costs in order to improve performance.”
