TANGANDA Tea Company (Tanganda) says packed tea exports into the region grew by 100 percent during the quarter ended December 31, 2023 attributed to the company’s successful penetration of the Democratic Republic of Congo market.
The diversified group said the implementation of diversification of regional markets for packed teas as a growth strategy has begun to yield.
“Sustainable market diversification will continue to be pursued to expand the regional market,” Tanganda said in a trading update.
Tanganda said demand for its products remains strong despite the impact of complex macroeconomic factors on the local and regional markets.
“The confidence from our customers and their support, including the value addition projects in the pipeline for our plantation crops, will help in improving company profitability,” the company said.
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Tanganda said despite the decline in production, bulk tea export volumes grew by 18 percent to 1 274 tonnes from 1 076 tonnes achieved in the previous year owing to improved logistical arrangements for more export shipments.
The company added that packed tea sales volumes of 475 tonnes were 14 percent below the 549 tonnes achieved in the prior year.
“Notwithstanding that the customer order book is full, a combination of packaging supply constraints, power outages and managing customers to reduce defaulting customers’ risk are among the factors that resulted in a reduction in sales volumes.
“Subsequently, volumes have started to increase as constraining factors have eased and the cumulative variance has begun to narrow,” the company said.
Tanganda highlighted that avocado and macadamia plantations which are under precision irrigation are looking healthy and the harvest of these crops will commence towards the end of the second quarter of the financial year.
The company’s revenue for the quarter under review declined by nine percent to US$5 million from US$5,5 million achieved in the comparative prior period.
The company said it will focus on cost management measures and improved efficiencies to curb the adverse impact of galloping inflation caused by the currency volatility.
“The operating environment is expected to remain volatile and complex due to continued inflationary pressures, currency instability, escalation of costs, and reduced consumer disposable incomes.
“Management will continue to focus on improving efficiencies across the company by re-engineering all processes including purchasing, staffing, process flows, agronomic practices, selling, distribution and internal controls,” Tanganda said.
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