Staff Writer 
IMPROVED volume performance and cost cuts enabled sugar producing firm Star Africa Corporation (Star Africa) to return to profitability, shrugging off stiff competition from cheaper imported sugar flooding the local market, the company has said.
In its interim results statement for the six months to September 30, 2024, company chairman Rungano Mbire said the group reassessed its distribution strategies to sustain sales volume performance in the wake of high informalisation of the market, coupled with exchange rate distortions.
Resultantly, turnover for the period under review increased by 37 percent, rising from ZWG381,8 million to ZWG523,9 million primarily driven by a notable increase in sales volumes.
“This improved performance was driven by a combination of increased sales volumes and effective cost-optimisation initiatives. The group remains committed to streamlining operations to further enhance profitability,” Mbire said.
The group posted a profit of ZWG25,6 million compared to a loss of ZWG86,9 million in the prior year which it attributed to improved product supply and reinstatement of duty on imports.
“The business entered into a long-term raw sugar supply arrangement, which facilitates better planning. In addition, the business is also realising the benefits of the on-going cost-optimisation initiatives,” Mbire said.
Gold Star Sugar increased production and sales volumes by 66 percent and 65 percent respectively in comparison with the prior period.
Granulated white sugar production and sales increased to 36,818 tonnes and 36,625 tonnes, respectively.
Country Choice Foods (CCF) sales volumes of sugar specialty products were up five percent from 631 tonnes in the previous period to 663 tonnes in the current period.
“The growth was attributable to the business’ adaptive selling model in challenging market conditions. The business unit continues to assess the performance of its product portfolio in line with demand. CCF has adequate production capacity and continues to explore ways of achieving volume growth,” Mbire said.
He however raised concerns over 2025 national budget failure to categorize industrial granulated white sugar to standard rating for VAT purposes “posing a significant threat to the local sugar industry, as the status quo translates to higher costs and selling prices.”
The government recently reviewed the special surtax on beverage sugar content on cordials from US$0,001 per gramme to US$0,0005 per gramme.
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