Online Reporter
Michael Tome
Business Reporter
STARAFRICA Corporation expects a stable operating environment to 2026, anchored by tight monetary policy, fiscal discipline, a positive agricultural outlook and firm mineral prices.
In its trading update for the half year to September 2025, Starafrica’s management expressed a strong belief that the stable operating environment will support a gradual recovery in consumer demand.
The diversified group said macroeconomic stability remained a key positive factor, with agriculture and mining expected to provide demand anchors for the broader economy.
Zimbabwe’s economy has been increasingly stabilising due to several factors, including the central bank’s tighter monetary policy stance, the introduction of a new gold-backed currency (ZiG) in April last year, strong performance in the mining and agricultural sectors and ongoing Government-led business reforms and re-engagement efforts with international partners.
Despite the improving conditions, Starafrica said that its sales volumes at the sugar refining business declined by 26 percent to 27208 tonnes from 36 625 tonnes in the prior comparative period.
Demand-driven production declined to 28 686 tonnes from 36 818 tonnes previously, attributed to weaker business-to-business (B2B) demand, as key industrial customers reduced sugar usage in response to the sugar tax, opting instead for non-nutritive sweeteners to manage costs.
“We anticipate a stable operating environment, as supported by a tight monetary policy and fiscal discipline. A positive agricultural outlook and strong mineral prices are expected to act as anchors for a recovery in consumer demand.
“Nonetheless, the lack of progress in addressing key value chain issues on the sugar tax and VAT classification continues to impact margins negatively.
“The group will continue to engage the Government through the Zimbabwe Sugar Association on these important policy matters, as they have an impact on the Zimbabwe Sugarcane Industry Development Strategy to double output in the next 10 years,” said Starafrica chairman Dr Rungano Mbire in the statement accompanying the half-year financials.
In the period under review, Starafrica’s Goldstar Sugars (GSS) operation adopted a deliberate pricing strategy to secure a sustainable competitive position against imports.
As a result, sugar imports progressively slowed during the period.
According to Dr Mbire, GSS had adequate access to raw sugar and sufficient working capital to meet market demand, while the plant continued to operate efficiently and ongoing improvements have enabled the refinery to achieve operational efficiencies even at lower throughput levels.
He said the group expected to complete the plant’s refurbishment and automation programme by the 2027 financial year.
The Country Choice Foods (CCF) segment recorded strong growth, with specialty volumes rising 47 percent to 976 tonnes from 663 tonnes in the comparative period.
Growth in this division was driven by higher business-to-customer (B2C) exposure, supported by improved distribution and a responsive pricing model.
On the other hand, the properties and investments segment delivered steady performance, with rental income increasing 10 percent to US$166 612 from US$150 019 in the prior period.
The growth was underpinned by rental adjustments and strong tenant retention.
Dr Mbire also indicated that the group is seeking to optimise the property portfolio by disposing of non-performing assets and refurbishing those with strong income potential.
As a result of lower sugar volumes, consolidated turnover declined 25 percent to US$27,3 million from US$36,2 million in the prior period.
Goldstar Sugars was the main contributor to the decline, as industrial customers adjusted consumption patterns in response to the Sugar Tax.
However, the group reported an improvement in profitability as operating losses narrowed to US$252 337 from US$272 666, supported by productivity improvements, cost rationalisation initiatives, better working capital management, and reduced exchange losses amid a more stable exchange rate environment.
The loss after tax for the period was reduced to US$189 105, compared to a loss of US$457 842 in the previous year.
Looking ahead, Starafrica said it remained optimistic, with expectations that macroeconomic stability, agricultural recovery and firm commodity prices will translate into improved consumer demand and operating performance.
