Afdis defies headwinds

ROBIN PHRI

African Distillers Limited (Afdis), a publicly listed producer of wines and spirits, has demonstrated remarkable resilience in a year defined by currency volatility and economic uncertainty.

Despite the introduction and rocky debut of the Zimbabwe Gold (ZiG) currency— which depreciated by 43% by the end of September 2024 due to rising inflation and widening disparities between the official and black-market exchange rates—Afdis managed to post strong growth across its product lines.

Company Chairman Matlhogonolo Valela described the past year as “challenging but ultimately productive,” citing an overall volume increase of 15%.

“Wines grew by 29%, spirits by 7%, and our ready-to-drink (RTD) beverages rose 21%,” Valela said.

Valela attributed the company’s solid performance to a deliberate pivot toward the independent trade segment, which has proven more resilient than major retail chains during periods of economic stress.

The operating environment was further constrained by tight liquidity in ZiG and limited access to local currency, prompting authorities to implement restrictive monetary policies. While initially difficult, these measures helped stabilise the exchange rate and pushed a broader shift toward USD-based transactions—an adaptation Afdis successfully embraced.

In addition, Valela applauded government efforts to clamp down on illegal imports and counterfeit products, particularly within the informal sector. He said these interventions were beginning to yield positive results for formal businesses.

“We have started to see more stable pricing and improved demand in the formal business space,” he said.

Looking ahead, Valela expressed cautious optimism, buoyed by Zimbabwe’s improved agricultural output and momentum in strategic sectors such as mining, tourism, and infrastructure development.

“We are encouraged by a favourable agricultural season, alongside growth in the mining, tourism, and infrastructure development sectors,” he said.

He further commended the government’s anti-smuggling drive, calling it a necessary measure to promote fair competition and protect compliant players like Afdis.

As the company navigates an increasingly unpredictable economic landscape, its priorities remain focused: leveraging new growth opportunities, expanding market penetration, and consistently delivering quality products, while playing an active role in building a stable, transparent, and competitive economy.