Power cuts hit starafricacorporation
BUSINESS REPORTER
The Zimbabwe Stock Exchange listed sugar processor, starafricacorporation, has been hit by crippling power cuts resulting in marginal decline in production volumes in the quarter to December 31, 2022.
In a trading update for the period under review, starafricacorporation company secretary, Aldo Musemburi, said its unit, Goldstar Sugars, reported a 0.4% decline in production volumes of granulated white sugar.
“For the third quarter of the 2022/23 financial year, Goldstar Sugars’ production volumes of granulated white sugar were 0.4% lower than those attained during the prior year comparative period. Power and steam supply constraints were the main causes of the marginally reduced throughput, as they negatively impacted plant uptime,” Musemburi said.
He said the reduced production led to a 0.2% decrease in sales volumes, compared to prior year.
“Notably, the unit completed an overhaul programme of two of its five boilers. In addition, the business installed an 11kVA dedicated electricity line, procured a 1,000kVA generator (for controlled plant stoppages, following power cuts) and electrical cables to mitigate power supply challenges.”
Musemburi also revealed that Country Choice Foods commissioned an automatic syrup filling machine, deployed a more robust competitive pricing strategy, and introduced new product lines, including caramel popcorn, baking and cocoa powders in the period under review.
“The initiatives positioned the unit’s products among the most affordable in the market, resulting in notable increases in production and sales volumes of 16% and 8%, respectively, compared to prior year,” Musemburi said.
However, Goldstar, last week shut down its sugar refinery in the capital Harare, citing exorbitant prices of raw sugar.
The sharp rise in prices of raw sugar resulted in the company’s products becoming uncompetitive.
“Post the reporting period, the sole supplier of raw sugar increased its prices significantly, resulting in the company’s products being uncompetitive. The business was already operating under untenable trading conditions that this supplier had imposed,” Musemburi said.
