dyton mupawaenda
Michael Tome
Business Reporter
CABLE manufacturer CAFCA says its volumes grew by 23 percent in the first quarter to December 31, 2024, buoyed by strong growth in aluminum and copper product uptake.
Aluminum volumes increased by 74 percent and the copper-based business delivered a 13 percent growth, underscoring the company’s diversified strength.
According to Cafca, utilities and commercial segments experienced substantial growth, with volumes surging by 187 percent and 83 percent, respectively, compared to the same period in the previous year.
These gains highlight the company’s successful efforts to expand its customer base and capitalise on emerging opportunities in these sectors.
Cafca’s first-quarter performance sets a positive tone for the rest of the year, with the company well-positioned to continue its growth trajectory and solidify its market presence.
“Volumes for the first quarter ended December 31, 2024, grew by 23 percent, supported by a 74 percent growth in aluminium volumes compared to the prior comparative period.
“The copper-based business grew by 13 percent compared to the prior comparative period.
“Utilities and commercial business showed substantial growth, with volumes increasing by 187 percent and 83 percent, respectively, compared to the prior comparative period,” said Caroline Kangara, Cafca company secretary in the company’s trading update to December 2024.
However, CAFCA reported a notable decline in retail and distribution volumes for the period under review after a 25 percent downturn.
The company attributed the performance to constrained trading environments and the growing informalisation of the sector.
The cable manufacturer said the decline was further exacerbated by the influx of smuggled products, disruptions in market channels, and intensified competition within the industry, which continued to exert pressure on trading margins.
A challenging trading environment was largely punctuated by the adverse impact of drought on agricultural output, as well as weak commodity prices affecting other minerals in the Zimbabwean economy.
Even the relatively stable performance in the mining sector, driven by gold production, was insufficient to offset the far-reaching effects of the tough economic climate.
The combination of these factors created a perfect storm that hindered CAFCA’s retail and distribution segments, highlighting the need for the company to adapt and innovate in response to the evolving market landscape.
Cafca’s ability to navigate these headwinds and identify opportunities for growth will be crucial in determining its future success.
“Retail and distribution volumes declined by 25 percent in the first quarter against the previous year due to the constrained trading spaces mostly influenced by the informalisation of that particular sector.
“The market saw an increase in smuggled goods products, disruption of market chains, this was compounded by limited circulation of the Zimbabwean gold,” said Kangara.
CAFCA experienced a 39 percent decline in exports compared to the prior year due to foreign currency supply gaps in key export markets such as Malawi, Mozambique and East Africa.
Despite this setback, the company achieved a 29 percent revenue growth for the quarter under review, compared to the previous year.
However, CAFCA’s production operations faced significant challenges, including power disruptions and surges, which resulted in equipment breakdowns.
Notwithstanding these difficulties, the company successfully met customer production requirements, demonstrating its resilience and commitment to customer satisfaction.
Looking ahead, CAFCA indicated that it intends to concentrate on enhancing operational effectiveness to safeguard margins and drive profitability.
Nevertheless, CAFCA acknowledges that the operating environment in Zimbabwe remains challenging, with policy changes, currency instability, and power supply disruptions continuing to pose significant risks.
Online Reporter