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STARAFRICA Corporation has completed upgrading its sugar refining plant in Harare with commissioningz set for the second week of August, the company’s chairman Joe Mtizwa has said.The refining plant in Bulawayo however remains under care and maintenance.
The company embarked on plant upgrade of its Gold Star Sugars Harare eight months ago to enhance operational efficiencies. GSSH, StarAfrica’s main cash cow is now set to double production.
“The upgraded plant will increase capacity from 300 tonnes per day to 600 tonnes,” Mtizwa said in a statement accompanying the group’s full year financials ended March 31.
“Pre-commissioning tests, dry and wet runs are in progress with commissioning anticipated for completion in the second week of August. As a result, GSSH will be able to consistently satisfy refined sugar requirements for all domestic market segments and have a surplus to export.”
Production at GSSH declined 72 percent to 4,6 tonnes in 12 months through March this year due to eight month shut down. Sales volumes were adversely impacted by low production volumes and this was compounded by influx of lower priced sugar on the local market.
“Management is in the process of negotiating with all key material suppliers, with view of ensuring that raw materials will be supplied to the upgraded plant at viable prices,” said Mtizwa.
“Revenue for the period was down to $9.3 million from $23.3 million due to an eight month shut down of sugar refiner in Harare. Net loss was $12.1 million down from $16.4 million a year earlier. Finance costs for the year were $4.8 million. Country Choice Foods recorded an operating profit of $330,286 during the period under review.
“Blue Star Logistics was adversely affected by low business volumes from GSSH and liquidity constraints. Polyfilm Plastics and Highfield Bag were also affected by inadequate capital. On asset disposal, the company is discussing with potential buyers for the company’s 33 percent stake in Tongaat Hulett Botswana.
“The transactions will be concluded by September 30. Proceeds from the disposal will be channeled towards partly settling lenders and creditors, in line with the group’s scheme of arrangement,” said Mtizwa.
Online Reporter