LISTED cables manufacturer, Cafca Limited has witnessed export volumes increasing by 8,5%, an improvement which comes amid calls by the government for local companies to tap into foreign markets in order to yield real economic growth.
Saddled with foreign currency shortages, Zimbabwe enacted a raft of policy to revive exports through policies such as the National Export Strategy (2019-2023), which envisions to stimulate growth in exports of goods and services.
Other interventions made by authorities to date, include availing of foreign currency on the Reserve Bank of Zimbabwe (RBZ) foreign exchange auction and resuscitation of value chains across the economy, among others.
Presenting a trading update for the third quarter this week, Cafca’s company secretary, Caroline Kangara, revealed the cable manufacturer’s strategy was feeding into the broader national export vision.
“During the period, export volumes were 92 tonnes in the current quarter compared to 85 tonnes in the same quarter last year. The figure signifies an 8,2% increase,” she said.
The company posted a strong performance, which cushioned profitability against increased borrowing rates.
“Banks have moved interest rates above 200 %, which obviously will materially reduce profits though our interest bill will still be at least four times covered by profit.
“Historical, year to date turnover and profit against the same period last year increased by 197 % and 251 % respectively,” Kangara said.
Beyond the borders, the company’s customers in Malawi faced difficulty in obtaining foreign currency prompting sales in that market to be slightly constrained.
However, Rwanda and Mozambique contributed to a growth in year on year
Locally, volumes for the quarter were 8 % up on the same quarter last year with the growth mainly in mines and factory cash sales while aluminium conductor sales were down mainly due to the impact of awaiting regulatory approval for the barter deal with ZETDC.
“Cafca has three months’ sales cover in finished goods stock giving us the ability to meet the +/- 1400 stock lines the market requires in relation to our weekly production target of 16 line items.
“We believe that the next three months’ volume will be higher than the current quarter’s volume which should result in the company achieving year on year growth in volume sales,” added Kangara.