AfDIS optimistic on bottles supply

LIVINGSTONE MARUFU

Listed spirits and wine maker African Distillers (AfDIS),  is optimistic the cider bottles supply will improve by the end of this month despite the headwinds in the first three months of this year, Business Times can report.

AfDIS managing director, Stanley Muchenje, said the positive sentiment comes from improved production at its main supplier Consol of South Africa.

“We are optimistic  that by the end of this month, the company will have enough  cider bottle supplies following the improved performance from Consol South Africa,” Muchenje said, adding that the “preferred cider will be in abundance by the end of  the month.”

Business Times reported last week that AfDIS was battling serious cider bottle shortages.

Muchenje said  AfDIS has  started ordering  more cider bottle supplies  following the Consol’s satisfaction of its own market.

The company is also considering sourcing bottles from the UAE and Tanzania, he said.

The  consumer staples concern is setting up a cider fermentation plant in Harare at a cost of US$1m.

The plant is expected to be complete by the end of the first quarter.

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

Muchenje 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.

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

The consumers’ spending was further improved by increased activity in the key sectors of the economy such as agriculture, mining and infrastructure projects, AfDIS said.

The country however experienced a fourth wave of Covid-19 towards the tail end of the quarter which resulted in some disruptions to business operations as it led to higher employee absenteeism during periods of high infections.

Foreign currency generated from trade continues to benefit the economy as it makes it easier to fund external supplies of raw materials and capital equipment.

He said the company will continue to benefit from its US$ sales   and  support  from the shareholders.

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