Greenback sales rise to 85%, AfDIS says
LIVINGSTONE MARUFU
African Distillers (AfDIS), a wine and spirits manufacturer with a listing on the Zimbabwe Stock Exchange, has said that United States dollar sales have increased to above 85% of total sales, allowing the company to continue operations.
It happens at a time the majority of businesses in Zimbabwe have difficulty accessing foreign currency on the auction platform.
Apparently, AfDIS has made forays into the informal sector in an effort to capture the greenback from the small traders.
The development was revealed by AfDIS managing director Stanley Muchenje.
He told Business Times: “Given the high level of dollarisation in the economy most of our sales are in United States dollar terms and this put us at a good position.
“We continue to apply for more forex on the auction platform but the amounts fell short of our requirements hence we are depending on sales to fund the operations to sustain business,” Muchenje said.
It also occurs at a time when AfDIS is still vying for market share that has been lost to illegal products.
In its latest trading update for the quarter to June 30,2023 AfDIS witnessed a considerable shift of business from formal retail chain stores to smaller traders as the use of United States dollars continued to increase.
Its topline in the reviewed period increased by 143% over the prior comparable period.
“Revenue growth was due to increased volume and inflation related price adjustments,” AfDIS company secretary Lydia Mutamuko said.
The company reported a volume growth of 11% in the period under review, with the Ready-to-Drink segment accounting for the majority of this growth at 26%, thanks to better product accessibility.
Mutamuko said the spirits volume grew by 1%.
She said AfDIS was coming up with strategies to recapture lost market share in the wine market which is under threat of cheap imports.
The company once held a monopoly on the Zimbabwean market, but over the past few years it has suffered a severe setback as a result of the influx of inexpensive imported and illegally smuggled goods that have significantly reduced its market share.
“Wine category volume declined by 13% due to competition from cheaper imported brands and reduced consumer traffic in key account retail chain stores which impacted negatively on demand,” she said.
According to Mutamuko, the business is now concentrating on the affordable market segment as it attempts to reclaim market share from cheaper and illegal goods.
Despite the uncertainties surrounding exchange rates and the availability of utilities, she claimed that the economic environment still offers opportunities for business growth.
The management continues to put measures in place to exploit the available opportunities to sustain market share, revenue, and profitability growth.
Mutamuko said the company will focus on product innovation, production efficiencies and cost containment measures.
