The group’s total assets during the period under review amounted to US$64,9 million.
The introduction of a multi-currency system coupled with the withdrawal of the Zimbabwe dollar as the functional currency ushered in a new era for the economy.
Political stability was partially addressed by the formation of a government of national unity and for the first time in almost a decade the economy recorded a recovery.
“The acute shortage of liquidity which remained throughout the year was a constraint to capacity utilisation,” said TSF.
The national tobacco crop production for 2009 increased by 14% from 50 million kg in 2008 to 57 million kg in 2009.
TSF said its market share increased to 40% during the period under review and expected its share to increase “even further” in 2010.
The tobacco industry expects the 2010 tobacco crop output to grow to about 75 million kg, a 32% increase.
“This will positively impact on most business. A business rationalisation exercise is already under way in order to contain costs, improve service to customers and enhance the economy’s visibility,” said TSF.
The group’s subsidiaries traded mixed with the paper and packaging division’s domestic volumes declining by 1,5% due to competition from imported products while exports dropped 26% as a result of the company’s inability to compete at international level.
“Total volumes declined 15% for the year. The decline in volumes coupled with stiff competition from imported products necessitated a rationalisation of group operations,” said TSL.
For the retail business, volumes remained depressed as a result of working capital shortages. The company’s share of tobacco wrapping business declined by 21%. This was because of direct sourcing of tobacco wraps by tobacco contract growers.
“A plan to recover market share has already been put in place for the 2010 financial year,” TSL said.
The second half of the financial year saw a firming up of demand for the agricultural chemicals division as farmers prepared for the 2009/10 agricultural season. Sales for 2009 exceeded 2008 by 88%, while capacity utilisation averaged 30% in the second half of the year from as low as 5% at the beginning of the year.
The horticulture division saw production declining by 1,4% from the 2008 level mainly as a result of the replanting exercise carried out during the year, according to the group.
Going forward the group said the gradual normalisation of the economy which commenced in 2009 was expected to continue in 2010 with the 2010 GDP growth expected to be significantly higher than last year.
Domestic volumes were expected to recover during the year in response to general increases in capacity utilisation as well as improved financing options.