Diversified agriculture firm Tanganda has reported a decline in export volumes for the third quarter ending June 30, 2024, due to production timing issues and packaging material constraints.
Bulk tea exports dropped by 9% to 4,504 tonnes compared to the same period last year. The decline was attributed to the timing of sales, with production being concentrated in the third quarter. The company also faced packaging supply shortages and working capital management challenges, which further impacted its export figures.
“The 9% decline in bulk tea exports reflects the timing of sales and concentrated production in the third quarter. However, we remain confident in our strategy to diversify and grow our presence in regional markets,” said Tanganda’s group company secretary, Ms. Sharon Kodzanai.
Despite the challenges in bulk tea exports, Tanganda’s diversification efforts showed promise, with packed tea export volumes into the region increasing by 50%. This growth in regional exports is part of the company’s strategy to reduce reliance on traditional markets.
“Our sustained market diversification efforts have resulted in a 50% growth in packed tea export volumes into the region. This is a clear indication that our strategy is yielding positive results, despite the challenges we face in other areas,” Ms. Kodzanai added.
However, the company’s macadamia exports told a different story. Despite a 61% increase in production volume due to improved yields per hectare as plantations matured, macadamia nut-in-shell exports declined by 33%, falling from 735 tonnes to 494 tonnes. This decline was attributed to a delayed start to the marketing season, which affected the timing of sales.
Financially, Tanganda reported revenue of US$3.4 million for the quarter, consistent with the previous year. However, revenue for the nine months ending June 30, 2024, declined by 5% to US$14.5 million, down from US$15.3 million in the prior year. The company’s profit after tax also saw a decline, dropping by 8% to US$1.2 million from US$1.3 million.
“Our financial performance reflects the complexities of the current operating environment, characterized by both policy changes and the impact of the El Niño-induced drought,” said Ms. Kodzanai. “However, we have put in place mitigatory strategies to enhance process efficiencies and manage costs, which we believe will improve performance in the coming quarters.”
Looking ahead, Tanganda remains cautiously optimistic, anticipating continued challenges due to the operating environment, including the effects of the newly introduced ZiG currency and other fiscal and monetary measures. Despite these challenges, the company believes that strategic refinements and a focus on enhancing yields and market diversification will help sustain growth.
“The demand for our packed tea products remains firm both locally and regionally, and we are focused on sustaining our market diversification efforts,” Ms. Kodzanai stated. “We are optimistic that our mitigation strategies will allow us to navigate the current challenges and improve our performance in the future.”
While Tanganda’s export volumes have been impacted by various factors, the company’s commitment to market diversification and strategic adjustments signals a resilient approach to sustaining long-term growth. – Herald