Axia remains resolute in delivering growth

LIVINGSTONE MARUFU

 

Axia Corporation Limited says it will focus on strategic priorities to expand the company, despite prolonged  challenging market conditions and continued uncertainty.

Axia company secretary Prometheus Corporate Services said the company is better prepared to withstand a depressed industry outlook.

“The group  remains focused  on executing the expansion  opportunities,” Prometheus said.

Axia subsidiary, TV Sales & Home acquired an additional 11% in Restapedic, a local bed manufacturer, to increase its shareholding to 60% effective  July  1 2021 .

This enabled TV Sales & Home to fund the construction of a new multi-million US$ state of the art factory, which commenced in August 2021.

This new factory will result in the business growing its production to meet increasing local demand and service export markets.

The group will open a retail store in Bulawayo by the end of the second quarter.

Axia also said new store sites have been secured in Chiredzi and Victoria Falls.

TV Sales & Home volumes grew 36% compared to the same period last year and continues to trend upwards, benefiting from competitive pricing, consistent product supply, the positive momentum of credit offerings and exciting consumer promotions namely Winter Warmer, Birthday Bash and Euro 2020 that were active in the quarter.

DGA Zimbabwe volumes were 20% below the prior comparative period mainly due to the restructuring of the original agreement with the Progroup.

The resultant reduction in volume sales from the Progroup agency was partly compensated for by the new distribution agreement that was executed with National Foods Retail distribution business.

Prometheus Corporate Services said this agreement is a significant addition to the business.

In the region, DGA’s first quarter volumes in Malawi were 58% up compared to the comparative period, owing to the impact of newly acquired distribution agencies which came on board during the period.

These include Unilever effective on August 1 2021, BIC and Clover effective on April 2021 and July 2021 respectively.

Malawi has now become a significant contributor to the positive performance of the regional business.

Prometheus Corporate Services said the Zambian kwacha appreciated against key supplier currencies such as the South African rand and United States dollar following the positive political sentiment after the recent Presidential election.

The appreciation of the exchange rate resulted in market-wide corrections of business cost bases which led to demand for price reductions and resultantly shrunk product demand.

Zimbabwe has been experiencing an exchange rate crisis in the past few months, resulting in prices of goods and services skyrocketing.

Axia is, however, hoping the monetary authorities will come up with policies to stabilise the exchange rate to make business viable and profitable.

“Towards the end of the quarter, foreign currency issues started to dominate the market. It is our fervent hope that sustainable, practical and progressive policies are adopted to deal with these issues and we are encouraged by the recent attempts by the authorities to work with the private sector in this regard,” Prometheus Corporate Services said.

The company said  the business has since corrected its pricing positions in response to market conditions.

As a result, first quarter volumes in Zambia were 29% below those attained in the comparative period.

Axia is operating a hardware store as a joint venture with another industry player.

The volumes in the hardware store are encouraging with focus in the quarter having been on fast-moving and essential hardware lines as well as supplying key lines for construction with another store set to be opened in Q2 F2022 under the same joint venture model.

 

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