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Dumisani Nsingo, Senior Business Reporter
LEADING cooking oil and soap manufacturers, United Refineries Limited (URL) has resumed exports into the regional market albeit on a lower scale owing to lack of adequate raw materials to enhance its production capacity.
URL chief executive officer Mr Busisa Moyo said the company has already started exporting to Namibia, Botswana, Malawi and Angola as part of its efforts to grow its foreign currency coffers.
“We are only breaking into exports now, it’s still early days. Inconsistent raw material availability is a big constraint at present. We are stabilising the supply side before going full throttle in the second half of the year. We are exporting oils and more recently our soap products. These products were already being taken across by cross border traders but we are now doing so on the back of the internal devaluation of the RTGS (Real-time Gross Settlement) dollar, which allows us to be more competitive in export markets. The United States Dollar was too strong for export viability in the region,” he said.
The company was forced to halt exports around the year 2000 due to a myriad of challenges, including a downturn of the economy due to illegal economic sanctions.
URL, which has sustained its operations for the past 20 years through processing cooking oil and laundry bar soap, has over the past few years re-introduced and launched a number of products.
Four years ago, the Bulawayo-based company re-introduced its three range of soaps namely Image, Vogue and Fresh Health Joy whose packaging was inscribed in English as well as Portuguese specifically aimed to target Portuguese speaking nations.
Two years ago it launched its new mayonnaise line under Roil Mayonnaise brand and an olive oil brand, where olive varieties are grown in the Eastern Cape and last year it introduced fortified mealie-meal and vegetable extract juices.
Mr Moyo said last year the company’s sales volumes plunged by between 15 and 20 percent due to shortage of foreign currency to procure strategic raw materials.
“Year 2018 was a decent year but volumes were down 15 to 20 percent across major lines due to raw material, foreign currency challenges and weakening demand in fourth quarter and damp Christmas in terms of commercial activity,” he said.
The company’s capacity utilisation is at 30 percent but it is projected to rise to above 50 percent buoyed by the anticipated improved supplies of raw materials.
“Our capacity is currently very low and below 30 percent, but our outlook for the third quarter is above 50 percent based on our pipeline and a few initiatives we are working to stabilise our supply side,” said Mr Moyo.
Online Reporter