DT Correspondent
Harare: – Transport and logistics firm, Unifreight Africa Limited (Unifreight) plans to increase its fleet of FAW trucks and allocate additional assets towards the cross-border market.
In a trading update for the third quarter of 2023, Unifreight Group chief executive officer Richard Clarke said the local market was focusing on investing in the smaller FAW28 model as a cost containment strategy.
“This increase is driven mainly through an investment in capacity during Q1 2023, where Unifreight procured 100 X FAW28-380FT which were paired with AFRIT Taut-liners.
“The 100 FAWs have been operating within the local Zimbabwean market. However, depressed rates/KM have resulted in us moving some of the fleet onto more lucrative cross-border contracts. During Q4 2023 and into 2024, we aim to further increase our fleet of FAWs and to allocate additional assets toward the cross-border market.
“For the local Zimbabwean market, we are focusing on investment in smaller FAW28 290hp and FAW8 140hp trucks with volumetric configurations to better serve the local market at lower running costs per KM. This strategy is aligned with our cost containment and cross-border strategy that is proving to be an effective model,” said Clarke.
Clarke further added that the major issue within the market has been the lack of affordable finance.
“While the exchange rate has remained largely stable during Q3 the major issue within the market has been the lack of affordable finance. Loans in USD (while better priced than ZWL) were available only on short tenure owing to the expiry of the dual currency law in 2025, however, at the time of writing the multicurrency system has been extended to 2030 which means banks are now able to lend on longer tenure.
“Another challenge is the forced arbitrage in formal retail where goods were required to be priced in both USD and ZWL, but the exchange rate used was controlled by the RBZ and resulted in goods being priced cheaper through the informal market,” he said.
Meanwhile, the company’s Q3 volumes have increased from 50,000t in 2022 to 120,000t in 2023, a noteworthy 135 percent increase. Q3 expenditure remained flat year on year with a marginal two percent increase between 2022 and 2023.
Clarke noted that the combination of a 135 percent increase in top-line growth and a marginal two percent increase in expenditure has resulted in a fantastic year-on-year turnaround from a loss-making position in 2022 to earnings before interest, taxation, depreciation and amortisation (EBITDA) profit of ZWL 3.4b for Q3 2023.
