adminDumisani Nsingo Senior Business Reporter
WINES and spirit maker African Distillers (Afdis) Limited has started exporting its cider range of products to Malawi. The company has also received its Southern Africa Development Community certificate of origin which will see new markets being opened in the regional bloc. Afdis managing director Mr Cecil Gombera said the Sadc certificate of origin will enable the company to export to many countries in the region at favourable tariffs in line with the regional bloc’s trade agreements aimed at encouraging movement of goods within member countries.
The company tabled plans to explore markets in Sadc and the Common Market for Southern and Eastern (Comesa) trading blocs after commissioning its state-of-the-art $5 million cider production and packaging line in Harare last year.
Sadc rules of origin are the cornerstone of the Sadc intra-regional trade and serve to prevent non-Sadc goods from benefiting from the preferential tariff treatment offered under the trade regime.
“We have since received the Sadc certificate of origin. Comesa certification is still work-in-progress. We have this far exported into Malawi and we are closely watching the performance of the product in that market and planning the next shipment accordingly. We are now working on exports to Zambia and Mozambique,” Mr Gombera said.
Before commissioning the new line, Afdis was importing its ciders and most of its wines from South Africa.
“We continue to import most of our wines from South Africa and this will be the case for a while as we develop local wines to complement the portfolio. On the ciders, Savanna Dark and Savanna Light are also being imported for now but will eventually be produced locally when appropriate volume thresholds are achieved,” Mr Gombera said.
Early this year the company upgraded its Green Valley wine brand and also launched Forth Street wine.
The company’s locally produced ciders seem to have been well accepted with a growth of 56 percent as reflected in its financial year ended June 2015.
“Locally produced ciders match the South African products in every respect and have been well received by the market. In addition to the quality they are better priced hence the positive response from consumers,” Mr Gombera said.
The company produces the Hunters range of ciders and some of the Savanna ciders.
He said the installation of a new machine last year significantly increased capacity hence utilisation remains low.
The new investment resulted in the business’ installed annual production capacity improving from 34 million to 54 million litres.
The latest packaging line produces 4 200 litres per hour, an improvement from the 1 300 litres produced on the old lines.
Confederation of Zimbabwe Industries president Mr Busisa Moyo said exporting was important to local companies as it enabled them to expand sales.
“We encourage exports because they increase economies of scale in terms of volumes. If one is able to produce big volumes it means they can lower the costs and become more competitive and be able to increase overall profitability,” Mr Moyo said.
He, however, said companies should build competence locally before starting exports.
“Our market is relatively small with a population of 14 million in comparison to the Comesa market which has a population of about 300 million. We should be looking at more export markets that may offer greater opportunities for sales,” Mr Moyo said.
Zimbabwe is trying to boost its export volumes as it has recorded a trade deficit over the years which has been heavily skewed towards imports.
According to Zimbabwe Statistics Agency, Zimbabwe’s trade deficit in the six months to June rose to $1,83 billion from $1,76 billion last year. Imports amounted to $3,06 billion and exports were at $1,23 billion.
Imports remain heavily skewed towards consumption as there has been a drop in the importation of raw materials as industries’ capacity to pay remains constrained in the absence of cheap money.
Bongani Ndlovu
Online Reporter