ZIMBABWE Sugar Refineries Corporation Ltd (ZSR) says its domestic sugar business incurred a $4 billion loss due to unviable sugar prices and low production.
ZSR chairman, Oliver Chidawu, said that the loss incurred during the six months ended September 30 is against a $1,2 billion profit which the corporation made in the same period last year.
“Only 62 995 tonnes of refined sugar were sold, compared with 70 201 tonnes sold last year.” Chidawu said that the current fuel shortage and logistical problems with the National Railways of Zimbabwe (NRZ) being unable to move raw sugar and coal consistently to the refineries had affected operations of ZSR adversely.
He said refined sugar exports to Botswana and Namibia were 14 487 tonnes, compared with 15 886 tonnes exported in the comparative period last year.
In an interview with businessdigest two months ago, ZSR chief executive, Pattison Sithole, cautioned that the company would not be able to produce to normal capacity this year because of logistical problems.
ZSR, which produces about 40% of Zimbabwe’s sugar, is currently hamstrung by the shortage of coal and foreign currency.
The company used to import coal from Botswana but Sithole said they have since stopped due to lack of foreign currency.
Chidawu said ZSR has established a new haulage company in South Africa as part of its regional expansion drive. He said the haulage operation is already operating and its performance is pleasing.
He said ZSR’s transport company, Bluestar Transport, was operating satisfactorily and is in the process of procuring its own delivery fleet,” he added. Chidawu said that efforts are ongoing to establish a business in Zambia. ZSR is a diverse business involved in transportation through Bluestar Transport, wholesale and retailing through Redstar and Advance, packaging through Polyfilm and several other businesses.
Chidawu said that Bluestar incurred a loss of $4,5 billion due to the chronic shortages of diesel and this adversely affected volumes. He said the wholesale business achieved a profit before tax of $88,3 billion of which $60,4 billion came from Redstar.
ZSR intends to list Redstar on the Zimbabwe Stock Exchange as a separate entity. “The packaging business contributed $69 billion to the group’s results due to improved operating efficiencies and focused margin management,” Chidawu said. He said the group’s share of profits from the associated company in Botswana was $10,3 billion compared with $4,9 billion achieved in the comparative period last year.
Local companies have suffered losses as a result of price controls on basic goods that were introduced by the government to cushion consumers against inflation.