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.