ZMBABWE Stock Exchange-listed wine and spirit maker African Distillers (Afdis) is battling to source raw materials for its product range owing to an acute shortage of foreign currency on the market, businessdigest has learnt.
By Kudzai Kuwaza
Afdis MD Cecil Gombera revealed in an interview last week that the lack of forex on the market has adversely affected the production of 90% of its product range.
“We are finding it extremely difficult to continue getting supplies from South Africa because we are heavily reliant on what forex the banks allocate us with to continue to do business,” Gombera said.
“Our performance is therefore curtailed because we are finding it extremely difficult to ensure that we have our full range of products on the market.”
He said the lack of foreign currency has affected nearly all of their products.
“Most raw materials are imported and this affects almost the entire range of our products,” he said.
“I would say almost 90% of our products need some form of raw material that is imported. We need to continually bring in raw materials to ensure that we continue to run the factory and thereby supply the market adequately.”
Gombera said the forex shortage has forced them to put on hold the development of most of its new product lines, focussing instead on what is already available on the market.
He said the company is currently making efforts to generate foreign currency through exports to countries in the region such as Malawi.
“We have tried to improve forex availability through exporting our products to Malawi and Zambia, but this is not sufficient to fuel the business,” he said.
Gombera, however, said his group had managed to introduce a new product, Gold Blend Black, an extension of the company’s existing Gold Blend whisky brand.
He said they had also introduced Star Cane, a cane product targeted at the lower end of the market, including the rural areas.
The cane product, Gombera said, has been well received on the market.
He said they had experienced difficulties in navigating roads to some of their rural markets as they have been badly affected by the rains.
Gombera said they had laid off staff to reduce overhead costs and reposition the business.
He said 2017 would be a very difficult year and hinges on the availability of foreign currency which he hopes will be improved by the tobacco season.