AfDIS hit by cider bottle shortages

LIVINGSTONE MARUFU

Listed spirits and wine maker, African Distillers (AfDIS) has been hit by a shortages of cider bottles owing to  limited supply from its South African supplier.

The shortage would affect the company’s plan to produce ciders locally and also impact on its capacity utilisation, AfDIS managing director, Stanley Muchenje, told Business Times this week.

“The company is facing serious cider bottle shortages due to the limited capacity at the glass supplier Consol South Africa. And Covid-19 shutdowns in SA worsened the supply gaps,” Muchenje said.

The shortage of bottles comes at a time when AfDIS is setting up  a cider fermentation plant  in Harare at a cost of US$1m.

“We are at an advanced stage of completing our cider plant which is scheduled to be completed in the next coming weeks.

“The US$1m is mainly for hunters dry and hunters gold but other ciders can also be processed in that plant to cut costs,” Muchenje said.

He said the localisation will reduce the company’s forex requirements and this will go a long way in cutting costs.

In its trading update for the quarter to December  31, 2021, AfDIS revenue grew by 57% for the quarter and 52% for the nine months in inflation adjusted terms over last year for the quarter and nine months respectively.

“This is as a result of volume growth emanating from firm demand over the festive season.

“The company continues to leverage on foreign currency generated from trade to ensure continuous supply of imported inputs and to contain supply chain costs,” AfDIS said.

Wine volume grew  67%  largely driven by  4th Street due to improved availability and affordability following the local production project which was commissioned in the quarter under review.

Spirits and ready to drink volumes  grew  17% and 41% respectively.

AfDIS said the trading environment for the quarter under review was stable  with the relaxation of Covid-19 lockdown restrictions resulted in increased economic activity.

Consumers spend was further improved by increased activity in the key sectors of the economy such as agriculture, mining and infrastructure projects.

AfDIS said the company will continue to benefit from the growth in key sectors of the economy despite the high inflation, depreciating exchange rate and the Covid-19 effects.

Management will continue to focus on strategies that grow market share and consequently enhance shareholder value.