ZIMBABWE – Delta Corporation Limited, a leading beverages producer in Zimbabwe, has increased its shareholding in wine and spirits firm, Africa Distillers Limited (Afdis) to 50.1% as the majority shareholder.
Before the additional share accumulation, Delta held 8.29% in direct shareholding in Afdis while Afdis Holdings private limited held the largest shareholding in Afdis at 59.38% followed by Old Mutual at 10.45%.
“Turning to investments Delta has been making, the group effective shareholding in Afdis has increased to 50,1 percent and the entity has been consolidated as a subsidiary,” said Mr Moses Gambiza, Delta Southern Region general manager responsible for sparkling beverages.
Distell International a leading South African wines and spirits producer has maintained a residual shareholding in Afdis at just below a percent.
The consolidation of Afdis by Delta follows a spree of other purchases in recent periods where in 2017 Delta acquired Natbrew a Zambian sorghum beer brewer from parent AB In Bev at a purchase consideration of US$12.3 million.
In the last quarter of 2018, Delta splurged on another regional sorghum beer producer United Breweries South Africa to acquire full owenership of the firm.
“I’m also happy to report that the company announced in December that it had entered a binding agreement to acquire a 100 percent stake held by Diageo PLS in United National Breweries (UNB), a South African company.
UNB is the leading brewer of traditional beer and owns the Chibuku brand in South Africa. Efforts are underway to finalise the transaction based on agreed timeframes,” Mr Gambiza said.
Restrictive economic environment hampers cider exports
African Distillers has however, said that it has not resumed cider exports into the region due to the prevailing restrictive economic environment with currency distortions making it hard for Afdis to price its products.
Afdis had been exporting into the region after it commissioned its US$5 million cider packaging line in 2014, but shelved exports in 2016 as regional currencies weakened, reports NewDay.
“The business has not managed to export ciders into the region, given the prevailing economic environment which makes it very difficult to be price competitive in these markets.
We remain hopeful that when the economy recovers, there will be better export opportunities for the company,” Cecil Gombera, managing director Afdis said.
“The production process requires substantial amounts of forex and this has been scarce for a while now. The business has been struggling to secure critical raw materials and spare parts to enable the smooth running of operations,” he said.
Going forward, Gombera said focus would now be on business continuity as they endeavour to maintain brand visibility across its product portfolio at competitive prices.
“Cognisant of the need to retain its customer base and protect market share, the business will implement strategies designed to soften the immense pressure on disposable incomes likely to affect demand.
Product availability for the rest of 2019 is anticipated to be fair throughout the market,” he said.