Zimbabwean business executives optimistic in year ahead

Twitter complaint ... Addington Chinake, a senior partner at Kantor and Immerman has asked Twitter to remove offensive comments by Norton MP Temba Mliswa

HARARE – Business executives in the country are feeling more optimistic about expansion plans and the outlook for their companies over the next 12 months, yet still harbour deep concerns about the overall economic environment, an analysis of statements accompanying recently released financial results shows.

Of the eight firms that were looked at, only one, did not mention plans to expand or look for new opportunities.

Instead, the focus for Fidelity Life Assurance would be to continue to implement “proactive strategic initiatives” to preserve value for stakeholders, according to chairman Fungayi Ruwende.

Ruwende said the Group is continuing with its strategic initiatives which include among others; revenue protection through careful selection of markets, streamlining distribution channels, deliberate asset preservation efforts by the business through investing in hyperinflation-resilient investment options, unlocking value through balance sheet restructuring activities, re-engineering the operating model of the Malawi Business to improve financial and operational performance and cost containment in line with Covid-19 induced depressed revenue lines.

“As a business, we will continue to be cautious and maintain strategies that are resilient in these tough times.

“De-risking Zimbabwe through further country diversification remains a key strategic priority for us as soon as regional and international borders open,” Ruwende said.

However, despite forecasting the economic environment to remain difficult as the far-reaching effects of Covid-19 remain protracted, his counterparts remain optimistic that opportunities for growth can still be found.

Addington Chinake, chairman at conglomerate Innscor, said the Group will continue to “assess and investigate capital projects which will provide long-term business model optimisation and efficiency.”

Chinake chose not to dwell on the economic challenges bedevilling the country but rather chose to focus on what the Innscor Group would do going into the future.

He said the Group will continue to evaluate growth opportunities in both adjacent and new categories in pursuit of its ongoing desire to create value creation for shareholders and to play its part in the successful re-building of the nation. Chinake looked to the positive rainfall patterns that are predicted for the 2020 agricultural summer cropping season and said focus will be applied to achieving lowest-cost raw materials. 

He said the Innscor Group remains the largest grain user in the country, and efforts to build internal capacity through contract farming, corporate farming, smart partnerships and small-scale capitalisation to supplement the supply of imported primary raw materials will continue.

“Management of inventory pipelines is one of the key critical success factors for a business of this size and nature, and so working capital and debt financing will continue to receive priority attention,” Chinake said.

The thinking is the same at subsidiary National Foods where management said “investments into the company’s manufacturing facilities continue on an on-going basis in an effort to further improve efficiencies and lower costs”.

At Axia, while management pointed out that trading conditions going into the new financial year remain largely unchanged as impacted by the Covid-19 restrictions and unstable macro-economic factors, this will still “present opportunities and the Group will continue to evaluate investment opportunities to preserve and sustain value for all stakeholders.”

Thomas Chataika, chairman of implements and equipment supplier Zimplow, though cautiously positive, still believes there are good leads in the construction and mining industry that are worth pursuing.

Zimplow, which recently announced plans to acquire businesses that are in the transport and logistics’ sector, will continue to look out for opportunities to expand its business reach, according to Chataika.

At First Mutual Properties, there was optimism in terms of what the future holds.

“We expect resilient demand off corporate occupiers, as this client group may require larger space in order to embrace non-pharmaceutical Covid-19 protocols,” the property concern said.

It’s the same at construction company Masimba where chairman Gregory Sebborn said the group has a “solid order book.”

Execution of the orders is, however, dependent on the impact of the pandemic on Masimba’s operations and that of its business partners.

“Focus will continue on value preservation strategies as guided by its value, growth and governance Pillars,” said Sebborn.

His counterpart at Dairibord, Josh Sachikonye said while the first half of the year was extremely challenging the second half presents better opportunities.

He said the opportunities will be anchored among other things a relatively stable exchange rate and improved availability of foreign currency through the auction system and domestic foreign currency sales leading to improved availability of critical raw and packaging materials. – Herald