Tanganda market diversification pays off
TANGANDA Tea Company, the largest producer, packer and distributor of tea products says the diversification of regional markets for packed teas as a growth strategy has begun to yield positive results.
The tea producer adds that value addition projects that are in the pipeline for plantation crops will help in improving company profitability.
Financials for the first quarter ended December 31, 2023 show that packed tea exports into the region grew by 100 percent in response to the company pursuing and supplying an opportunity that arose to penetrate the Democratic Republic of Congo.
Sustainable market diversification will continue to be pursued to expand the regional market, it noted.
Packed tea sales volumes of 475 tonnes were 14 percent below 549 tonnes achieved in prior year.
“The demand for our products remains relatively strong despite the impact of complex macro-economic factors on the local and regional markets.
“Implementation of diversification of regional markets for packed teas as growth strategy has begun to yield positive results.
“The confidence from our customers and their support, including the value addition projects in the pipeline for our plantation crops, will help in improving company profitability.”
Management, it said will continue to focus on improving efficiencies across the company by re-engineering all processes including purchasing, staffing, process flows, agronomic practices, selling, distribution and internal controls.
The firm highlights that despite the decline in production, bulk tea export volumes grew by 18 percent to 1 274 tonnes from 1 076 tonnes achieved in previous year owing to improved logistical arrangements.
“Despite that the customer order book is full, a combination of packaging supply constraints, power outages and managing customers to reduce defaulting customers’ risk are among factors that resulted in a reduction in sales volumes”
“Subsequently, volumes have started to increase as constraining factors have eased and the cumulative variance has begun to narrow,” it said.
Company revenue for the quarter under review of US$5 million was nine percent below US$5,5 million achieved in the prior year.
Tanganda Tea Company remains the largest producer, packer and distributor of tea products in Zimbabwe and distributes to wholesale and retail outlets on both the domestic and regional markets.
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