starafrica profits surge on improved product supply

Business Reporter

starafrica Corporation has reported a 37 percent surge in turnover to ZiG 523,9 million during six months to September, 2024, up from ZWL 381,8 million in the prior year driven by improved product supply and the reinstatement of import duties.

Growth was largely driven by a notable increase in sales volumes, reflecting the company’s ability to capitalise on market demand despite prevailing economic challenges.

The company recorded a ZiG25,6 million profit, a huge improvement from a ZiG86,9 million loss recorded in the prior year.

According to starafrica, the improvement signifies the group’s commitment to effective cost-optimisation initiatives and streamlined operations.

“Business observed an increase in sales volumes in comparison to prior year, largely attributable to improved product supply and reinstatement of duty on imports,” starafrica corporation chairman Dr Rungamo Mbire said in a statement accompanying the group’s half-year financials for the period to September 30 2024.

Starafrica said it would continue to engage the Government to find a lasting solution to protect Zimbabwe’s sugar value chain against the growing threat posed by the influx of illegal sugar imports.

Despite the government repealing Statutory Instrument 80 of 2023 on February 1, 2024, which legalised sugar imports, illegally imported refined sugar continues to flood the domestic market.

Goldstar Sugars (GSS), a subsidiary of Star Africa, was a key driver of the improved group performance.

Production and sales volumes surged by 66 percent and 55 percent, respectively, driven by the resolution of raw sugar supply challenges, increased plant availability, and the reinstatement of import duties.

The production and sale of granulated white sugar closed at 36 818 tonnes and 36 625 tonnes, respectively. Despite these gains, frequent power outages remain a significant obstacle.

Reliance on diesel generators is increasingly costly, making it crucial for the company to find a sustainable and cost-effective energy source to maintain operational efficiency. Country Choice Foods (CCF), another key subsidiary of starafrica, demonstrated resilience with a 5 percent increase in sales volumes of sugar specialty products.

CCF’s adaptive selling model proved successful in navigating challenging market conditions. By aligning its product portfolio with evolving consumer demand, CCF effectively maintained its competitiveness in a volatile market.