RYAN CHIGOCHE
Diversified conglomerate, Amalgamated Regional Trading (ART) Holdings says it is expediting the recapitalisation of its paper business.
It comes after the division’s sales volumes dropped 26% in the quarter to June 30, 2022, largely due to frequent breakdown of the mill.
The drop in volumes was also attributed to raw material shortages, erratic power supply witnessed in the period under review.
“The group will continue to focus on the recapitalisation of the paper segment in order to restore it to sustained profitability. Measures to improve cash generation have been instituted to mitigate the increasing cost of funding,’’ ART Corporation’s company secretary, Abisai Chingwecha said.
“He also said the new tissue mill and conversion plant in Kadoma was still on schedule to be operational by the end of the year.
The region’s waste paper collecting network, he said, was being expanded to boost raw material supply.
Funders continue to provide considerable assistance to the company,” Chingwecha said.
Last year, Art purchased 50% shares in Softex to to wholly own the business with the acquisition being expected to provide sustainable benefits to the paper industry.
Export volumes declined by 6%, as orders could not be met due to raw material shortages and the erratic supply of power. Domestic volumes were maintained at the same level as the same period last year.
Revenue for the group fell 28% in the quarter under review as market distortions posed pricing issues.
Chingwecha added that backlogs in the auction market worsened, as the group maintained raw material imports using foreign currency produced by trade.
The batteries division saw a sluggish volume growth momentum as volumes increased by 2% during the quarter compared to the prior year despite the expansion of the Exide Express distribution network.
Eversharp volumes increased 29% driven by local demand, which remained firm in the quarter and also improved foreign currency generation, which enabled timeous importation of inputs and the trading of supporting stationery lines.
Timber volumes grew 5% compared to the previous year, with sawmill downtime impacting structural timber output.
On the outlook, Chingwecha said the group will continue to carefully assess regional opportunities given the prevailing policies and economic conditions as it seeks value accretive growth through its capital investments,’’
The group, he said, is also anticipating the completion of the capacity upgrade at the Chloride factory to improve product availability.
The battery business is expected to remain resilient in the quarter.
