HomeBusiness DigestAsra to sustain 167% profit

Asra to sustain 167% profit

MD McKenzie Mazimbe told  businessdigest this week  that his  company had   opened  new  markets, in supplying paint to mining  companies as  Mimosa  and   Zimplats, a  development  he said  would increase  sales in the  division.

Mazimbe   said   this  will  also counter  the   stiff  completion from cheap   imports,   which saw    margins in the paints division  going  down by 6%  in the  half  year  ended 29 February 2012. 

“We  are  supplying  paint to  mining  companies like  Mimosa  and  Zimplats  which  are  on  an  expansion drive and this  will increase our  sales volumes,”  Mazimbe  said.

He said the company had embarked on an aggressive   marketing campaign to counter competition from cheap imports. 

The company  said  it had initiated  an  equipment  refurbishment  project to improve  production  efficiency  and  cut on maintenance cost.  The ongoing project, Mazimbe said, would be financed from internal resources.  

As part of its cost-cutting measures, Astra last year  stopped  operations on  the   loss-  making   steel  making division  which  saw company   profits   increasing   by  167%  to   US$751 412  in the  financial  year  ended   29  February  2012.

In  a statement attached to the financial results the company said  plans  were  underway   to lease  the Astra Steel property   which  Mazimbe   said  should  continue  to contain costs.

He said the group would continue on its recovery drive and concentrate on its core businesses —   paints and chemicals.

Revenue increased 21,5 %  to US$13,5 million, while aggregate sales grew 19% buoyed by a 20% increase in sales  in  the  chemicals division.
The chemicals division contributed 39% of   the   group’s   profit.

Sales volumes in the paint division went up 15%, although margins declined by 6%. 

Astra’s major shareholder, Finance   Trust  of   Zimbabwe  wholly-owned  by  the  Reserve Bank of Zimbabwe,  last  year indicated  that it  would  dispose of its entire stake  in  the   company.

According   to Astra, the process is still ongoing.

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