Exports save CAFCA

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CAFCA says demand on the domestic market remains depressed but the company is increasing exports to generate foreign currency and cushion it from losses.

In a trading update for the three months to June 2019, the cable manufacturer said sales volumes had suffered due to subdued demand in the country amid tough economic conditions.
Sales volumes for the first six months of the year amounted to 1 384 tonnes, down from 1 588 tonnes during the same period in 2018.
However, the company says its exports increased significantly during the period under review.
“On the positive side, year to date exports by volume are 10,3 percent of sales compared to 4,8 percent in the prior year,” the company said.
This has also helped the company to keep “the numbers employed at the same level as last year”, despite the downturn.
Piniel Mkushi, CAFCA’s chairman, said the company requires $150 000 monthly for raw materials.
“We use a lot of forex to import copper, hence we are grateful that our export market has increased by over 30 percent in the last six months. This has assisted us because out of the export proceeds we have an allocation to import raw materials,” he said.
Mkushi said the firm, which counts Botswana, Zambia and Mozambique among its regional markets, is expecting to earn at least US$250 000 per month against total sales of $3 million.
“We haven’t managed to get all the forex we would like because we have a big market. Currently, we buy some of the foreign currency from local banks as the Reserve Bank of Zimbabwe last allocated us forex as far back as September last year,” he added.
Last year, CAFCA indicated that it had put its recapitalisation plans on hold due to the worsening foreign currency shortages. Its managing director, Rob Webster, said the company requires at least $4 million in hard currency annually to recapitalise operations.
“We have budgeted on spending $4 million per annum on recapitalising, though, without forex, this will not happen. There is no point in using precious foreign currency on machines if there are no raw materials to put through them,” he said.
Apart from selling the majority of its products to national power utility ZESA Holdings, CAFCA also sells to the mining, construction, retail and telecommunications sectors.
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