Online Reporter
Business Reporter
Axia Corporation is looking to strategically position its business and drive growth by tapping into the fast-growing informal sector.
Group chief executive officer, Ray Rambanapasi, said the company had recorded notable growth across several business segments in the previous financial year, despite currency volatility and supply chain pressures.
Mr Rambanapasi said Axia had successfully expanded into exclusive product lines designed for higher-end customers, while simultaneously tailoring new offerings for the informal sector.
“In the segment of exclusive offering to a particular clientele, the pricing of such products is a little bit on the high side when compared to a normal TV Sales and Home (TVSH),” he explained.
“Even the product range is higher quality than what we already had. It’s a way to tap into another market that felt our products were on the cheap side.”
The Victoria Falls Stock Exchange-listed company has opened a new factory shop aimed at serving price-sensitive buyers.
“We want to tap into the informal market through the use of our manufacturers and their support, so that we can start operating at a great range,” said Mr Rambanapasi.
The bedding division, which produces under the Restapedic brand, has become central to Axia’s manufacturing strategy. Revenue in the fourth quarter rose by 24 percent on the back of a 28 percent increase in volumes, driven by expanded plant capacity.
“At half-year, we indicated that Restapedic bedding is now the heart of manufacturing. We believe our volumes will continuously increase,” said Mr Rambanapasi.
“On a year-to-date basis, revenue increased by 18 percent, being driven by 25 percent growth in volumes.”
The growth was partly spurred by the opening of a distribution hub in Bulawayo and the use of business-to-business channels.
TVSH, Mr Rambanapasi added, had also begun producing bedding under licence from South Africa’s Restronic, targeting the high-end bedding segment but at accessible pricing.
“From capacity utilisation, we are running around 60-70 percent. Our main focus is to feed the Zimbabwe market first before we extend beyond borders,” he said.
Despite strong demand, the group acknowledged that relocating its main factory operations in Harare had temporarily disrupted performance. Moving machinery and management structures during the fourth quarter weighed on output, contributing to an 18 percent decline in performance.
However, Mr Rambanapasi said the consolidation would pay off from the second quarter of the current financial year.
“If all the machinery is under one roof, it helps in terms of synergies, managing costs, and reducing operating expenses such as electricity and security,” he noted.
Axia’s automotive retail and fitment centres, Transerv, saw mixed results, with a modest rise in sales offset by weaker solar product revenues due to market oversupply.
Nonetheless, the specialised division, including fitment, grew by 84 percent.
New store roll-outs boosted revenue, with eight outlets opened during the year, although two were closed due to poor performance.
“If there is non-performance, we are not hesitant to close, because we want to make sure we serve our customers while getting some return,” Mr Rambanapasi said.
Distribution operations under DGA also recorded changes, with the subsidiary restructuring certain joint ventures to streamline its core agency business.
The company recently secured a significant portion of Nestlé’s distribution portfolio in Zimbabwe, a move expected to strengthen earnings from October onwards.
While operations outside Zimbabwe, notably Malawi and Zambia, were affected by currency swings and agency changes, the group remains focused on defending its balance sheet and prioritising local growth.
Mr Rambanapasi said the depreciation of the Zimbabwe dollar in September 2024 and delays in foreign currency settlements had cost the business nearly US$2 million.
However, the majority of retail transactions are now conducted in hard currency.
“Ninety percent of our sales are in US dollars. We believe stability in the market will help from a planning perspective,” he said.
Looking ahead, the chief executive is confident Axia will continue to expand.
“Our pricing is another area we are always looking at vis-à-vis the space we operate in. With the quality we provide, that should give customers confidence in what they are buying from us,” he said.
For Axia, Zimbabwe remains both the anchor and the growth engine of the group. The bedding business, informal market strategy and distribution partnerships are expected to underpin performance in the year ahead, even as regional challenges persist.
