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Tanganda defies odds

Paul Nyakazeya

TANGANDA Tea Company shrugged off a turbulent six months to record a turnover growth of 668% from $83 billion to $640 billion in the interim period ended


However, the group’s production declined by 216 tonnes in the period under review.

Pre-tax profit increased by 1 567% to $473 billion from $28 billion while earnings per share rose to $3 247 from $218 during the prior year.

Tanganda, the country’s largest tea grower, said its production declined from 6 553 tonnes last year, to 6 377 tonnes.

The company attributed the decline to the late rains following a dry winter.

“Rainfall was in line with decennial average, although a late start to the season after a dry winter did impact on production,” the company said.

“Labour shortages also affected volumes and slowed the planting of macadamias and coffee,” added Tanganda.

During the period under review, Tanganda’s production costs increased by 497% compared to the same period last year in response to the average inflation for year-on-year period of 564%.

The exchange rate regime, which is based on the interbank rate, negatively affected the company’s profitability and cash generation capacity.

“The continuing rigidity of the exchange rate combined with lower production means profitability and cash generation has been impaired,” said the company.

Despite a decline in production, the company’s exports increased by 679% to $360 million from $46 million reported during the same period last year.

The company reported that international tea and coffee prices have remained firm and the coffee crop looked set to meet expectations.

The company, which also produces quality coffee, is divided into two main divisions — the agricultural and beverage divisions.

Volumes at the beverages division slumped by 40% as a result of packaging problems and reduced demand from the local market.

“Beverage division sales volumes are expected to be lower than last year,” said Tanganda.

The group has embarked on a capital programme concentrating on essential replacement expenditure and plantation development.

The programme has so far chewed up $22,9 billion in the six months against a budget of $86,3 billion.

“Beverage division sales volumes are expected to be lower than last year,” said Tanganda.

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