eBusiness Weekly
Kudakwashe Mhundwa
HARARE – Sugar processing firm, Starafrica Corporation says it anticipates growth in operations in the second half of 2018 on the back of a recent resumption of exports to Botswana and the reduction in the company`s debt burden.
Earlier this year the company converted about $46 million of its debt into equity as a way of clearing its balance sheet.
“The secondary scheme of arrangements has progressed very well 70 percent of the total scheme debt was converted into equity thereby reducing total indebtedness to $25 million from $68,4 million. Discussions are ongoing with the view of achieving further conversions.” Starafrica chairman Joe Mutizwa told shareholders at the company`s annual general meeting held last week.
Also addressing shareholders Starafrica chief executive officer Regis Mutyiri said the company`s outlook was strengthened by take-off of exports to Botswana and debt to equity conversions which had reduced the interest burden.
“During the period under review efforts were focused on developing the export market and this saw the resumption of export of granulated white sugar to our associate company in Botswana in August 2018.
“Arrangements are at an advanced stage to export Country Choice Foods (CCF) products to Botswana in the third quarter. Other regional markets are being explored with trail quantities having been exported to one of the countries in SADC region.
“Volumes are forecast to grow further in the second half on account of the resumption of exports to Botswana and the establishment of other regional markets.
“In terms of our export strategy we are growing, by year end we are looking at about 10 percent though there is anticipation to even grow further,” said Mr Mutyiri
On operations, Gold star performed fairly well for the five months to August 2018 though management highlighted that the company will continue to engage the National Social Security (NSSA) over plant refurbishments.
“During the period under review, Goldstar sugar Harare and country choice foods grew sales volumes by 38 and 28 percent respectively over the comparative period in the prior year.
“This performance is attributed to ongoing marketing initiatives and activities that improved the visibility of Gold star and CFF brands on the market and improved demands from industrial consumers.
“We are now competitive; however, we are not supplying 100 percent of the local market.
In terms of the plant its performing reasonably well though it still requires refurbishment. That is why we are still talking about NSSA as the refurbishment is aimed at adding life to the plant so in terms of production we are still to meet demand,” he said.
