HomeBusiness DigestCafca set to clear debts by end of quarter

Cafca set to clear debts by end of quarter

Webster told shareholders at the company’s annual general meeting last week that the group had taken up the facilities as a strategy to pile up stock.
The group’s borrowings as at September 30 2011 stood at US$751 112.

The group currently has 200 tonnes of stock.

“About 200 tonnes is the preferred target number for holding, which the group will use to support sales,” Webster said.

The order book was at 220 tonnes against a monthly production of 190 tonnes, he said.

However, Webster said  having an order book did not necessarily translate into sales as customers had been affected by the current liquidity challenges.
“Even though there is enough demand for the products, customers do not have the capacity to pay for it. Therefore we invoice very little,” said Webster, adding that the three big customers, who include the Zimbabwe Power Company and Powerspeed had all been struggling to pay.

In the four months to January, the company’s profitability went up 15% while turnover grew between 5-6% in the same period.

Webster said the group had enjoyed some economies of scale on operations, a development that helped improve profits particularly buoyed by the drop in the price of copper.

Turnover grew based on the mix the group was following. Webster said production efficiencies had led to an improvement in the profit to sales percentage.

The group was operating two 12-hour shifts, five days a week. Product lines had been limited to  15 a week but Webster said the group can now produce 65 products a month, which would reflect in improved profits.

He said the group was exporting 10% of sales to Malawi, Zambia, Mozambique and a limited amount to South Africa. 

The group was pushing through barter deals and had a consignment stock with mines in a bid to cut off their reliance on imports.
Cafca sells 99% of its  products and brings in less than 1% in the form of high voltage cables.

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