Cafca pins hope on its holding company in South Africa to increase sales in 2015, a company executive has said.
By Fidelity Mhlanga The company’s chairman Honour Mkushi said local sales will continue to be subdued as capital projects in utilities, mining, industry and construction were curtailed due to the liquidity crunch.
He said the liquidity crunch continued to deteriorate as more companies were under stress due to bank’s non-performing loans.
“The deterioration reduces the number of customers who are able to purchase and pay for cable resulting in lower local sales.
Lower local sales volumes lead to lower throughput and diseconomies of scale which could result in uncompetitive pricing versus imports and thus even less local market share,” said Mkushi in the company’s annual report.
He added that due to mastering the process of recycling copper there has been an increase in exports to South Africa from additional copper coming through the furnace
Cafca is a cable manufacturer and listed under the Zimbabwe, Johannesburg and London Stock Exchanges. Cafca is part of CBi Electric African Cables (RSA), which in turn is owned by Reunert Limited (RSA).
Company’s managing director Robert Webster said during the period under review volumes increased by 5% to 2110 tonnes of products.
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Exports predominantly channelled to South Africa increased from 313 tonnes to 363 tonnes.
He said the recycling project with Zimbabwe Electricity Distribution Company (ZETDC) was enabling the company to meet its 100 tonnes monthly target for the past four months.
“It is now 15 months since we last imported copper as a raw material relying solely on copper procured locally,” said Webster.
He said the company was focusing on getting 180 tonnes of copper per month so as to export 100 tonnes products.
The Aluminium plant according to Webster was currently capacitated to produce 125 tonnes per month.
He added that to shore up output there was need to increase monthly expenditure on spares and maintenance from 20% to between 25 % and 30%.
Cafca’s profit for the year ending September increases marginally from to $2 million from $1, 4 million due to lower finance costs.
