CAFCA prioritised the purchase of raw materials last year, as it could not source sufficient foreign currency to embark on a retooling exercise.
In an annual report, Cafca’s managing director Robert Webster said the electrical accessories firm incurred significant downtime and cost from engineering spares.
“Again, no investment was made this year on the new plant as all the foreign currency we could source was prioritised to procuring raw materials and spare parts. The age of our equipment requires us to have a significant investment in engineering spares and at year-end, we were carrying $63,8 million in engineering spares,” he said.
Despite the pressing need for retooling, Webster said Cafca capacity remains at 250 tonnes a month, with this year’s budgeted requirement taking the company to about 90 percent of capacity.
“The biggest challenge the manufacturing sector has at the moment is to access sufficient foreign currency to maintain the momentum and growth that all stakeholders’ desire ― provided timeous availability of foreign currency we are confident that volumes will grow in the coming year both in the local and export market,” he said.
For the year under review, Webster said the company’s staff complement increased mainly in sales and dispatch to cope with increased output.
“We are adequately staffed to meet our current capacity of 250 tonnes a month but should we need to increase capacity it is a matter of employing and training more people,” he added.
For the period under review, Cafca reported a 49 percent increase in volumes, which was the main driver in turnover increasing in historical terms by 293 percent to $3,3 billion.
The electrical cable manufacturer’s profitability at 31 percent turnover was ahead of the firm’s benchmark and attributable to the benefit of carrying stock in a hyperinflationary environment.
Webster said the improvement in economic activity after the Covid-19 lockdown saw volumes increasing from 1 744 tonnes in the prior year to 2 604 tonnes in the current year, an increase of 49 percent. Local demand picked up by 57 percent while exports improved by 16 percent.
On the outlook, Webster said the company was not anticipating any material changes in the current environment either locally or regionally and the cables manufacturer is confident of a moderate increase in volume in the forthcoming year would be achieved.
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