TSL Limited has started expanding its retail portfolio after demolishing its outdated warehouse to develop a new 10,000 square metre storage facility.
In a trading update for the first quarter to January 31, 2020, TSL company secretary James Muchando said the construction of this new warehouse is expected to be completed by the end of the year.
“The business has commenced demolition of an outdated 6,000 square metre warehouse to be redeveloped into a 10,000 square meter world class warehouse.
Consequently, occupancies for the quarter have marginally decreased by 1% from prior year,” said Muchando.
On business performance, the bulk of the group’s revenues came from supply of agro-inputs and provision of logistics and real estate services to various industries.
Muchando said the group will be focusing on growing tobacco, maize, soya, bananas and chillies in its farming operations.
Capital investments, process refinements, testing and introduction of technologies along with customer training and awareness programs in preparation for the start of the tobacco selling season are undertaken during this period.
Group revenue and profit performance for the period according to Muchando were satisfactory and ahead of prior year.
Preparation for the tobacco marketing season has been progressing as expected while indications are that the yields for the farming produce will largely be satisfactory.
Muchando noted that the new 25 hectare banana plantation is producing well and volumes are significantly above the same time in prior year.
Gearing for the company remained below 10% during the period under review while the majority of group working capital requirements have been funded from internally generated resources.
On agriculture operations, the Tobacco Sales Floor, according to Muchando is well advanced in preparation for the tobacco marketing season which is expected to start towards the end of the second quarter.
In addition, TSL will continue to invest in upgrading its handling facilities to improve the customer experience where Propak Hessian commenced distribution of tobacco packaging materials at the onset of the first quarter achieving satisfactory volumes.
Volumes of chemicals supplied into the market by Agricura during the period is ahead of prior year while the group ensured that there are adequate stocks available throughout its wide distribution channels.
As part of the strategic intent to manufacture smaller pack sizes that are relevant in the market, Agricura has imported and installed a sachet manufacturing line and an ampoule manufacturing line.
Powders, in pack sizes ranging from 10g to 80g and liquids, in pack sizes ranging from 4ml to 50ml, will be available in the market in the second quarter.
However, Muchando said volumes in some product lines, notably fertilisers, were below expectation owing to the 2019/2020 weather patterns.
With the coming of the rains, this position is expected to improve into the second quarter.
TSL noted that it continues to supply product into the Command Agriculture scheme.
On logistics operations, tobacco handling volumes were 42% ahead of prior year due to the extended tobacco processing season.