AFRICAN Distillers Limited (Afdis) has recorded an improved overall volume performance ahead of prior year in the four months of the 2015-2016 financial year driven by the growing demand for ciders and wine, a company official has said.
BY TARISAI MANDIZHA
Afdis has a June 30 financial year ending.
Ciders grew by 56% on prior year while the spirit business was up 8% above prior year and contributing 58% of total Afdis volumes.
Speaking at the company’s annual general meeting yesterday, Afdis managing director Cecil Gombera said the business performance for the year was good given the prevailing environment. However, the current market demand remains very depressed as disposable incomes continue to dwindle.
“Our volume performance to date is ahead of prior year driven by the growing demand for ciders and wine. Revenue performance, however, has lagged behind due to the high-valued spirit category in line with the economic environment,” Gombera said.
He said the spirit business in F15 contributed 58% of total Afdis volumes, but had experienced severe challenges under the current financial year.
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Gombera said the company was optimistic the brown spirit category would continue to dominate this segment and gain market share driven by the Gold Blend whisky brand.
“We expect the whisky segment to grow by an average of 22% this year. The white spirit segment is facing stiffer competition from the affordable house brands which are being launched by two of our major supermarket chains, but our vodka brand will contribute meaningful volumes for the business to remain competitive in this white spirit segment,” Gombera said.
He said strategies were in place geared to ensuring market growth in a declining market was achieved.
“We are ready to do business, we are proud to report we have been riding on a prior year growth of 40% this segment providing the greatest opportunity for overall volume growth. Local production of ciders which commenced in F14/15 provides the greatest advantage on the market, Ciders grew a remarkable 56% on prior year and while the growth rate has been achieved, demand remained very strong and future business growth will be spearheaded by these products,” he said.
