Ariston seeks to grow in macadamia output
Ariston Holdings Limited is geared to increase macadamia production following major investments into the segment, with additional orchards in the pipeline.
This comes as the Zimbabwe Stock Exchange (ZSE) listed agro-concern is looking to grow export earnings.
During the year to September 30, 2021, its macadamia production volume grew by 27 percent to 1 292 tonnes, and expected to increase going forward spurred by investments made into the segment.
During the year, Ariston disposed of 50 percent of its shareholding in Claremont Orchards Holdings(Private) Limited for US$2 million to Tuinbouw Zonder Grenzen, a company registered in the Netherlands.
Chairman, Alexander Jongwe revealed that part of the rationale for this transaction was to raise funding for further investment into macadamia nut orchards in Chipinge and Chimanimani.
“Further, the transaction enabled the entry of a foreign shareholder who has undertaken to provide significant funding for expansion of Claremont orchards into high value fruit and flower offerings primarily for the export market.
“It is envisaged that the sum of the two investments will provide Ariston shareholders with greater value than current. Regulatory approval for the transaction has been received and the sale proceeds were received shortly after year-end.
“With receipt of the sale of shares proceeds, the group will be planting additional orchards of macadamia nuts under irrigation as well as improvement in mechanisation of farm processes,” said Mr Jongwe in a performance review. In the period under review, average selling prices for macadamia exports declined by 7,5 percent. While the average selling price for large nuts remained the same as in the prior period, the price for the small nuts and low quality nuts came under pressure, thereby weighing down on average selling prices.
Overall, the 2020/2021 agricultural season had milder temperatures and greater rains than prior periods, which enabled quality and yields to improve in the tree crops.
However, the continued existence of the Covid-19 pandemic had a negative impact on global economies resulting in unsettled markets.
Said Mr Jongwe: “Demand for good quality macadamia nuts held firm although there was a slight weakening in the prices for smaller and lower quality nuts.
“Overall selling prices for the local sales remained relatively stable, although timing of lockdowns had an effect on sales of fresh fruit.
“Yields and pricing for cereals which are grown for the local market were good. This has enabledimproved contribution by local product sales to the group results.”
Tea production volumes improved by 6 percent to 2 748 tonnes due to wetter and cooler weather conditions experienced during the period under review than during the same period in prior year.
However, shortage of harvesting labour led to loss of approximately 300 tonnes of tea not being harvested in the current year.
Changes have since been made to production processes to mechanise some of the processes thereby leaving labour for harvesting.
The fruit category’s production volumes rose 17 percent to 3 195 tonnes from 2 729 tonnes produced in the prior comparative period and yields from the young orchards continue to improve.
Other products making up 21 percent of revenue comprise potatoes, soya beans, seed maize, commercial maize, seed sugar beans, avocado, bananas and poultry.
According to the Group, these have been growing progressively over the years with increasing significance to the group’s revenue and profitability.
“It is the Group’s strategy to continue to grow this category so as to broaden and reduce the group’s concentration risk in its product offering which has remained predominantly macadamia and tea,” said Mr Jongwe.
In terms of financial performance, revenue for the year grew by 31 percent mainly driven by increase in sales of products grown and consumed in the local market.
But the group posted an inflation adjusted loss after tax of $19 million, compared to prior comparative period’s profit of $217 million.-The Herald
