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Business Reporter
Diversified agriculture firm Tanganda reported a drop in export volume in the third quarter to June 30, 2024, weighed down by wrong production timing and packaging material constraints.
Bulk tea exports dropped by 9 percent to 4 504 tonnes compared to the same period last year. The dip was attributed to the timing of sales, with production being more concentrated in the third quarter.
Additionally, the company faced packaging supply constraints and stringent working capital management challenges, which further pressured its export figures.
“The 9 percent decline in bulk tea exports is a reflection of the timing of sales and concentrated production in the third quarter. We are, however, confident in our strategy to diversify and grow our presence in regional markets,” said group company secretary Ms Sharon Kodzanai.
While bulk tea exports faced challenges, Tanganda’s efforts to diversify its market bore fruit, with a significant 50 percent growth in packed tea export volumes into the region.
This growth in regional exports is a key part of Tanganda’s strategy to mitigate the risks associated with reliance on traditional markets.
Ms Kodzanai said, “Our sustained market diversification efforts have resulted in a 50 percent growth in packed tea export volumes into the region. This is a clear indication that our strategy is yielding positive results, despite the challenges we face in other areas.”
However, the company’s macadamia exports told a different story. Despite a 61 percent increase in production volume, thanks to improved yield per hectare as plantations matured, macadamia nut-in-shell exports declined by 33 percent, from 735 tonnes to 494 tonnes.
This was due to a delayed start to the marketing season, which affected the timing of sales.
On the financial front, Tanganda reported revenue of US$3,4 million for the quarter, consistent with the prior year.
However, revenue for the nine months ending June 30, 2024, declined by 5 percent to US$14,5 million, down from US$15,3 million in the previous year.
The company’s profit after tax also saw a decline, dropping by 8 percent to US$1,2 million from US$1,3 million.
“Our financial performance reflects the complexities of the current operating environment, characterised by both policy changes and the impact of El Nino-induced drought.
“However, we have put in place mitigatory strategies to enhance process efficiencies and manage costs, which we believe will improve performance in the coming quarters,” Ms Kodzai said.
Looking ahead, Tanganda remains cautiously optimistic as it anticipates continued challenges due to the operating environment, including the effects of the newly introduced ZiG currency and other fiscal and monetary measures.
However, Tanganda believes that these challenges can be mitigated through strategic refinements and a focus on enhancing yields and market diversification.
“The demand for our packed tea products remains firm both locally and regionally, and we are focused on sustaining our market diversification efforts,” Ms Kodzanai stated.
“We are optimistic that our mitigation strategies will allow us to navigate the current challenges and improve our performance in the future.”
While export volumes have been impacted by various factors, the company’s commitment to market diversification and strategic adjustments suggests a resilient approach to sustaining growth in the long term.
Peter Tanyanyiwa
Online Reporter