DT Correspondent
HARARE: Tanganda Tea Company’s packaged exports grew by 100 percent in the first quarter ended December 31, 2023, owing to improved logistical arrangements.
In a recent trading update, the listed tea processor said it will focus on sustainable market diversification as it expands into the regional market.
“Packed tea sales volumes of 475 tonnes were 14 percent below 549 tonnes achieved in the prior year. Notwithstanding 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. 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.
“The late onset of the rains has adversely impacted bulk tea production resulting in a 19 percent decline in volumes to 1986 tonnes compared to 2443 tonnes produced in the prior year. Despite the decline in production, bulk tea export volumes grew by 18 percent to 1274 tonnes from 1076 tonnes achieved in previous year owing to improved logistical arrangements for more export shipments to be processed before the Christmas break”
The company says Avocado and macadamia plantations which are under precision irrigation were looking healthy and the harvest of these crops would commence towards the end of the second quarter of the financial year.
On the outlook, Tanganda said the operating environment remains volatile.
Despite the Government’s efforts to contain inflation, the prediction is for a difficult second quarter due to factors beyond the Government’s control.
These include the impact of El Nino with reduced rainfall during the agricultural season as well as the ongoing wars in the Middle East and Ukraine, which affect the raw material supply chain and lead times, and in some instances lead to higher prices which cannot be absorbed and must be passed on to customers.
The shortage of adequate power due to reduced generation capacity is another problem which remains unresolved.
The order book however remains positive and the Board remains confident of the Group’s going concern status.
