HomeBusiness DigestArt feels pinch, as Eversharp gets blunt

Art feels pinch, as Eversharp gets blunt

BY CHIEDZA KOWO

ONE of the worst fears for chief executive officers (CEO) is losing markets to competitors, or a general exodus of frustrated clients.

If a competitor briefly pulls a shocker, significant jitters filter through from the CEO to the shop floor worker.

It is simple, corporations are fully briefed about the repercussions of laxity, and surrendering markets.

But it becomes a real catastrophe if a brutal health threat like the Covid-19 scourge blazes through unimmunised communities, forcing governments to lock up economies and order people, including approximately two million school children to hide in their homes.

The Zimbabwe Stock Exchange-listed conglomerate, Amalgamated Regional Trading Corporation (Art) said this week, it felt the pinch of the complete freeze of the education system as lockdowns arrived from April last year, knocking off a key market for its flagship Eversharp pen.

Eversharp is to the education system what Mazoe is to the entire market, or what Coca Cola is to the beverages market — a national pride that has carried the Art empire through many generations.

Art proudly describes it as the “Write Pen”, but with kids under lock and key, it suffered a 22% drop in volumes during the first quarter ended December 31, 2020,as the scholastic market tried to avoid a pandemic whose impact has only been equated to the Spanish influenza epidemic a century ago which killed over 50 million people.

CEO, Milton Macheka said this week the segment was only bolstered by a switch to the export market.

“Eversharp volumes declined by 22% as the scholastic market segment continued to be affected by the pandemic,” Macheka said,

“Management’s efforts to grow the export and the non-scholastic markets enabled the division to break even during the period,” the update, which showed overall volumes climbing 26% during the period compared to the previous year.

Export earnings increased by 7%.

He said volumes at Kadoma Paper Mills rocketed by 46% during the period, while volumes at National Waste Collections rose by 69%.

Timber output increased 8% after demand firmed, while battery export volumes improved by 5%.

Art’s Zambian battery operation pushed volumes by 7%.

Overally, battery volumes improved by 48%.

“The business performance however was affected by the high cost of raw materials, fuel and electricity. Waste paper imports were increased as availability of paper in the local market remained a major challenge. The operating environment in the first quarter…improved following the easing of Covid-19 trading restrictions. There was relative stability of the exchange rate on the foreign currency auction system. However, the group continued to rely on its export earnings and local free funds to sustain raw material imports. The supply of electricity improved during the period although the cost continued to escalate as prices were aligned to the prevailing foreign currency auction rates. The group anticipates its overall performance to remain positive despite mixed challenges in the economic environment,” said Macheka.

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