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Nelson Gahadza
Business Reporter
Zimbabwe Stock Exchange (ZSE) listed cables manufacturer CAFCA Limited says it has three months’ cover of finished goods stock and expects improved demand from the utilities sector.
CAFCA is the only cable manufacturer in Zimbabwe and manufactures and supplies cable and allied products for the transmission and distribution of electrical energy and telecommunication.
Ms Caroline Kangara, the company’s secretary said the current stock cover will enable the company to meet the plus or minus 1 400 stock lines the market requires in relation to its weekly production target of 16 line items.
“We believe that the next 3 months’ volume will be higher than the current quarter’s volume,” she said in a trading update for the quarter to December 31, 2022.
For the quarter under review, local volumes were 8 percent down on the same quarter last year with the drop being mainly in the utilities sector and factory cash sales.
“Utilities will pick up in the next quarter with 2 of the 3 Utilities placing new orders and the barter deal hopefully improving as the focus reverts to harvesting and not faults,” she said.
She noted that factory cash sales were down as a result of an uncompetitive US dollar price which has since been resolved with the change in the retention rules.
On exports, the group’s volumes were 34 tonnes down in the current quarter compared to the same quarter last year.
Ms Kangara said customers in Malawi continue to experience difficulty in obtaining foreign currency so stock replacement there is slow.
She said Mozambique in the comparative period had a large once-off order which was not repeated in the current year yet there is a large order to be delivered in March which will close the shortfall to this region.
“Rwanda is steady and we are expecting an order in March to DRC. We have opened a consignment stock arrangement in Tanzania,” said Mr Kangara.
She said in reaction to the RBZ increasing bank policy interest rate, the company had repaid all the Zimbabwe dollar borrowings.
However, historical year-to-date turnover and profit against the same period last year increased by 375 percent and 595 percent, respectively.
Cafca chief executive Robert Webster recently said the company invested $4,4 billion on stocks of finished goods to ensure an uninterrupted supply of cables into the local market.
The company’s primary market is Southern and Central Africa, although it has an export footprint that extends to parts of Europe, including Russia.
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