ZIMBABWE – African Distillers Limited (Afdis), manufacture, distributor and marketer of branded wines, ciders and spirits in Zimbabwe is nearing completion of its new US$1m cider fermentation plant.
The facility which is expected to commence operations in the first quarter of the year, is aimed to cut cost on local production of ciders, as it has been relying on importation of raw materials.
“We are in the process of setting up a cider fermentation plant which is expected to be completed by April. Various equipment and material were imported from South Africa with tanks already in the country.
“The US$1m is mainly for hunters dry and hunters gold but other ciders can also be processed in that plant to cut costs,” said Afdis managing director, Stanley Muchenje.
In its financial results for the six months to September 30 2021, Afdis’ profit slumped 71% to ZWL$46m (US$127,000) from ZWL$156.2m (US$431,600) reported in the same period the previous year, dented by rise in sale of illegal alcohol which have recently flooded the market, reports News Day.
Afdis Chairman Matlhogonolo Valela highlighted that localisation of some products and product innovation would sustain the operations of the company in the wake of the disrupted market.
Overall volumes in the period under review increased 66% over the same period the previous year, with wines and spirits volumes growing by 88% and 34% respectively.
The ready to drink segment volumes grew 116 % compared to the prior period, achieving the largest growth of the three group’s categories due to improved availability of ciders.
The company’s revenue increased 55% to ZWL$2.6 billion (US$7m) compared to ZWL$1.7 billion (US$4.7m) reported in the comparable prior year period.
Operating income, however, declined to ZWL$226.3m (US$625,300) in the period under review from ZWL$418.7m (us$1.15m) reported in 2020.
The slower growth in operating income is as a result of cost normalisation, increased distribution and Covid-19 related expenses, while growth in both inflation and historical terms was due to firm demand which resulted in higher volumes.
Afdis will focus on localising some of its brands as well as explore revenue and profitability growth opportunities through product innovation, riding on a stable operating environment.
This will also help the company to deal with Covid- 19 supply challenges that normally happens whenever there is a strict lockdown.
The company’s investments would ride on the operating environment, which is expected to largely remain relatively stable.
Muchenje said Afdis management will continue to explore growth opportunities and expand market share as well as improve production efficiencies and cost containment.