Tanganda implements strategies to boost efficiency and product value

CLOUDINE MATOLA

Tanganda Tea Company Limited is implementing strategies to enhance efficiency, manage costs, and increase product value despite challenging economic conditions, Business Times can report.

For over a decade, Zimbabwe’s economy has been in decline, creating an unstable business environment. Many companies have been forced to downsize or shut down due to these economic hardships.

In its trading update for the first quarter to December 31, 2024, Tanganda Tea’s company secretary, Sharon Kodzanai, said the company remains committed to sustainable market diversification to expand both regional and international markets.

“The company has put in place mitigating strategies to enhance process efficiencies and manage costs in order to improve performance. Despite challenges in the operating environment, we remain focused on adding value to our products. We will continue to pursue sustainable market diversification to grow our presence in both regional and international markets,” Kodzanai said.

She attributed the current business challenges to inconsistent policies and currency distortions.

“The operating environment remains complex due to policy changes and currency distortions,” she noted.

During the period under review, Tanganda Tea recorded a loss before tax of US$853,917, largely due to a decline in tea production volumes. Revenue fell by 12% to US$4.4m, down from US$5 million in the prior comparative period.

Bulk tea production dropped by 26%, with output falling to 1,463 tonnes from 1,986 tonnes in the same period in 2023, primarily due to the late onset of the rains. Export volumes also declined by 11% to 1,134 tonnes from 1,274 tonnes in the previous comparable period.

Additionally, packed tea sales volumes plunged by 31%, down to 330 tonnes from 475 tonnes in 2023, as challenges in the formal wholesale and retail markets—Tanganda’s primary distribution channels—persisted.

Kodzanai stated that in response to these challenges, the company is exploring alternative distribution strategies while maintaining strong relationships with existing customers.

“The company is pursuing alternative routes to market while maintaining relations with traditional wholesale, retail, and catering customers. This strategy aims to balance growth while ensuring the recovery and performance of our traditional customer base,” she said.