Adequate raw material stocks: Sugar firm
STARAFRICACORPORATION says it has maintained adequate raw material stocks to sustain operations in light of any supply chain distortions that may be caused by the Covid-19 pandemic.
In a trading update for the quarter ended 31 December, 2020, the manufacturing concern said: “The company has maintained enough inventory quantities to hedge against any supply chain interruptions caused by the pandemic and continues to improve its liquidity and solvency position through prudent working capital management practices”.
The firm said its board remains confident that the ensuing quarter would witness enhanced stability in the market.
It is hoped that this would boost the sugar producer’s capacity utilisation as demand for its products is expected to remain strong locally and in the region.
During the period under review, the company said the economic environment was characterised by increasing hyperinflationary pressures, intermittent power supply and pervasive liquidity challenges, which significantly affected the company’s operations.
“Although the quarter experienced some easing of the Covid-19 induced lockdown restrictions in the operating market, consumer spending remained significantly constrained due to low disposable incomes,” it said.
“The stability of the local currency that resulted from the introduction of the Foreign Currency Auction Trading System has also been sustained during the quarter, which increased confidence in the market and reduced speculative pricing tendencies during the first half of the quarter,” said the firm.
During the period Starafricacorporation’s business units, Goldstar, saw sugar production and sales volumes improving by 65 percent and 102 percent respectively from the previous quarter as production returned to normal after the company had a three-week total shutdown in the previous quarter due to the Covid-19 pandemic.
The Country Choice Foods unit made significant traction in product development and market growth as sales increased by 24 percent for the nine months to December 2020 from the prior comparable period. “Production and sales of new products have started to increase significantly, with products such as peanut butter, honey and pre-mixes well underway in their development and market testing phases.
“These developments are expected to enhance the company’s market footprint locally and, in the region, increase capacity utilisation and spread its risk across multiple product lines,” said the firm.-chronice.cz.w
