admin
LISTED agro-industrial concern Ariston Holdings is betting on normal rains for the 2016-2017 summer cropping season to lift its output, as a significant portion of its estates rely on rain-fed agriculture.
Last year, crop output in most Southern African countries, including Zimbabwe, was blighted by the El Nino weather phenomenon.
However, weather forecasters expect La Nina — which usually results in wetter-than-normal conditions for Southern Africa — to change farmers’ fortunes.
Ariston CEO Mr Paul Spear said recent the company had been putting more of its land under irrigation, with 65 percent of the group’s major crops now covered.
“Since 2012 considerable effort has been put into rehabilitation of existing irrigation and the establishment of new schemes. This means that at present more than 65 percent of the group’s key crops are under irrigation with potential to install irrigation on an additional 300 hectares of arable land when resources allow.
“The Chipinge operations have been profitable for the last three seasons; these operations represent 75 percent of group activity. Sales of branded teas are doing well this winter.
“Assuming a normal rainfall season we expect tea production to return to pre-drought levels this season and macadamia production this season was the same as last year, so we expect modest growth this season ahead,” said Mr Spear.
Ariston, whose six strategic business units across Zimbabwe are the Blended Tea Factory, Claremont, Clearwater, Kent, Roscommon and Southdowns Estates, projects that fruit output (at Claremont) will increase three-fold in coming few years as new orchards come into production.
Plans to generate hydroelectric power at Claremont by the end of September 2016 are underway, while the macadamia drying facility will be operational by the end of October ahead of the next crop.
Optimism is largely being driven by Afrifresh’s decision to convert its US$4 million worth of loans in the group into equity next month, which will reduce the company’s debt burden, strengthen its balance sheet and enhance profitability.
It is also envisaged that this will enable the company to raise cheap long-term capital.
Through the conversion of debt into equity, Afrifresh, which is Ariston’s majority shareholder, will improve its shareholding to 72,1 percent from 67,6 percent.
The National Social Security Authority’s shareholding will be whittled down to 8,76 percent from 10,17 percent.
Online Reporter