Cafca buoyant on 2022 prospects
LISTED Cable manufacturer, CAFCA says it is optimistic that its business will remain buoyant in the 2022 financial year citing improved demand for its product in the period.
CAFCA projects that the demand for its product will grow by 3, 85 percent to 2 700 tonnes from the 2 600 tonnes recorded in the prior comparable period.
To meet this impending demand, the cable manufacturing company hinted that it already had a stock cover of three months in finished goods which leave the company way ahead in terms of the product demand, lessening pressure in face of demand in the process.
Stocked finished product acts as a hedging strategy particularly considering the inflationary environment prevailing in the country, the company said.
CAFCA indicated also that it had secured loans and overdraft facilities amounting to $320 million which have the potential to improve the company’s financial position to execute some of its operations.
In a trading update, CAFCA’s company secretary, Caroline Kangara noted that the cable manufacturing company had put adequate resources in place to match the anticipated volumes growth in the year.
She however acknowledged the mounting pressure to consolidate market share in the region as competitors’ numbers and volumes continue to grow.
“The company’s management believes that despite Covid-19 the business will remain in operation for the foreseeable future. The company will continue operating as a going concern as demand for cable has remained firm with sales volume projected to increase to 2 700 tonnes from 2 600 tonnes in an ensuing way.
“We have budgeted for a modest increase in volumes in 2021/22 against a background of uncertainty in the foreign currency availability and pricing as well as the impact of increased competition in our regional markets,” said Ms Kangara.
In spite of the negative effects brought by the Covid-19 pandemic, the company has promised to take advantage of prospects that may arise in either the local or export markets through the adoption of adequate mitigating strategies against the challenging local economic environment as part of its future strategy.
CAFCA’s primary market is Southern and Central Africa, although it has an export footprint that reaches into European Union (EU) including Russia.
95, 8 percent worth of CAFCA’s produce in the prior year was consumed by local customers and the remaining 4, 2 percent volumes uptake went to exports.
Despite the hindrances that have been created by Covid-19 induced lockdowns, CAFCA said it was content that critical raw material suppliers were still able to ship raw materials without much interruption.
The Zimbabwe Stock Exchange-listed company manufactures and supplies cables and allied products for the transmission and distribution of electrical energy and telecommunications.
It also manufactures over 900 cabling products to British and South African markets including 11KV XLPE cables.
CAFCA Limited also recovers decommissioned cables for recycling and supplies telecommunication cables ranging from indoor to underground as well as aerial selfsupporting cables.
Established in 1947, CAFCA is a subsidiary of CBi Electric African Cables (South Africa) which is owned by Reunert Limited (South Africa).-eBusiness Weekly
