dyton mupawaenda
Michael Tome
Business Writer
CABLE manufacturer, CAFCA, reports a 23 percent increase in volume for the first quarter ending December 31, 2024, driven by significant growth in aluminium and copper uptake. Aluminium volumes surged by 74 percent, while copper-based business saw a solid 13 percent growth, highlighting the company’s diversified strength.
According to CAFCA, the utilities and commercial segments experienced substantial growth, with volumes increasing by 187 percent and 83 percent, respectively, compared to the same period in the previous year. These gains underscore the company’s successful efforts to expand its customer base and capitalise on emerging opportunities in these sectors.
“Volumes for the first quarter ended 31 December 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 Limited Company Secretary, in the company’s trading update to December 31, 2024.
However, CAFCA reported a notable 25 percent decline in retail and distribution volumes for the quarter ending December 2024, attributed to constrained trading environments and the growing informalisation of the sector. The cable manufacturer said the decline was further exacerbated by an 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 influenced 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.
“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.
Bongani Ndlovu