Costs management buoys Cottco

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THE Cotton Company of Zimbabwe (Cottco) is expecting to break even in its financial performance for the year ended March 31, 2024 in US dollar terms buoyed by the improved cost management.
In a trading update for the quarter ended January 31, 2024, the company said it settled US$19,6 million, and $7,2 billion of the farmer payments dues with outstanding dues expected to be cleared from product receipts by March 31, 2024.
The company said the final intake figures for the 2023 cotton buying season stood at 69 419 metric tonnes (mt), a 48 percent increase from the 46 748 mt achieved in the prior year.
Erratic power supplies in the last quarter of 2023 however delayed the completion of ginning.
“To date, 58 326 mt (84 percent) of seed cotton has been ginned with only 1 066 mt (two percent) having been toll ginned in the lowveld due to the high volumes in that area. Local and offshore lint customer collection is underway with 7 776 mt of lint in stock,” Cottco said.

“Ginned seed on hand is 4 642 mt and upliftment by seed suppliers and oil expressors is underway. 475 mt of lint has been converted to yarn since April 1, 2023, to date.”
Meanwhile, Cottco revealed that the Mutapa Investment Fund has taken over a 37,1 percent shareholding in the company as the fund accesses a key asset that can post profits.
“Following the promulgation of Statutory Instrument 156 of 2023, we wish to advise shareholders that government’s 37,1% shareholding in Cottco Holdings Limited, previously held in the name of Finance and Economic Development ministry is now held through Mutapa Investment Fund,” Cottco said.
Mutapa’s acquisition of a stake in Cottco comes at a time when the parastatal is in talks with Treasury, the central bank and financial institutions to raise US$6,8 million to pay off cotton farmers for deliveries.
The company said as a result of the El Nino conditions, the first effective rains were received in December 2023 and the 181,604 growers have so far established an estimated 128,152 hectares.
“The late crop will result in an estimated one-month delay in the intake,” Cottco said.
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