admin
Business Reporter
ZIMBABWE Stock Exchange listed African Distillers has received a shot in the arm from its major shareholders as the company looks to finish the installation of a new bottling line by June next year. It has emerged that shareholders Delta Beverages and Old Mutual are going to provide shareholder loans of US$5 million to Afdis for the acquisition of equipment that will see the company locally producing cider brands.
Local production of ciders is expected to commence around June next year. Managing director Mr Cecil Gombera at the group’s annual general meeting held two weeks ago said the group was currently putting together the equipment and all the feasibility studies have been done.
“We are on a modernisation drive to meet the demands of both the regional and international market, because we don’t want to be caught unaware by global trends,” he said.
Mr Gombera said the ready to drink market was the future in terms of the growth of the business.
Also at the AGM, the group said it was on course to achieve a 20 percent growth in turnover at the end of the financial year while a 16 percent volume increase is also expected.
Mr Gombera said notwithstanding the challenges of the diminishing disposable income, the business was on a growth trend after turnover in the first quarter increased 9 percent against the same ago period. Volumes had grown 6 percent mainly boosted by locally produced products. Brown spirits had grown by more than 30 percent as had the whiskies in particular the Gold Blend brand.
“Viceroy and Chateau are performing well and are in line with group expectations.”
White spirits continued to face stiff competition from cheaper products at the end of the market but the group was moving at addressing this.
Well placed sources said should Afdis require further funding down the line by way of a rights issue, then one of the two shareholders will be the underwriter and would most likely increase their respective shareholdings in the counter. Delta currently accounts for Afdis as an associate company.
Afdis is currently trading under a cautionary statement which analysts speculate relates to a recapitalisation drive to improve productivity and profitability.
Online Reporter