Online Reporter
Business Reporter
Beverages maker African Distillers Limited (Afdis) plans to invest US$5 million to expand its production capacity and boost output from 18 million litres to 30 million litres over the next five years.
This will enable the Afdis to capitalise on evolving consumer trends and seize emerging market opportunities.
Afdis’ primary business is the manufacture, distribution and marketing of branded wines, spirits, liqueurs and ciders for the Zimbabwean market.
According to Afdis, the investment could increase annual production capacity to 36 million litres if executed effectively.
The planned investment will also focus on enhancing local content and fermentation technology to improve the company’s production processes and product quality.
Additionally, the capital will be used to expand manufacturing capacity and strengthen distribution networks, enabling the company to reach more customers and expand its market presence.
Furthermore, the investment will be used to upgrade ready-to-drink (RTD) packaging solutions to align products with changing consumption patterns and evolving consumer preferences.
Afdis managing director Mrs Muchaneta Ndachena said the investment was aimed at boosting production capacity to meet rising demand amid growth in key sectors of the economy, including agriculture, mining and tourism.
“The company aims to grow its business over the next five years by doubling its production volume from 18 million litres. This growth strategy will be driven by capitalising on emerging opportunities, including anticipated GDP (gross domestic product) growth fueled by the mining and agricultural sectors, as well as infrastructure developments,” she said.
This comes after Afdis reported a 15 percent increase in volume growth in the 2024 financial year compared to the previous year, attributable to strong performance across its product portfolio.
The shift in the route to market in an evolving market also played a pivotal role in driving volume, considering the challenges faced by the formal retail chains.
The company’s wine segment recorded a 29 percent increase in growth, while the spirits segment recorded a seven percent growth, while the RTD segment experienced a 21 percent surge.
According to Afdis, consumer demand was further strengthened by persistent recommended retail price compliance initiatives, in addition to a reduction in informal imports due to the anti-smuggling campaign by Zimra.
However, Afdis said that it still faced stiff competition from illicit product manufacturers who evade taxes, creating an uneven playing field that makes it challenging for the company to compete on pricing.
It also emphasised the need for a thriving formal retail sector, noting that the decline of major supermarket chains has disrupted distribution channels.
The company expressed concerns that formal retail challenges have negatively impacted its sales and hopes for a revival in the sector soon.
This comes as the wines and spirits maker is reassessing its sourcing strategies for fruits and vineyards, aiming to increase direct involvement or support specialised producers.
