BY KUDZAI KUWAZA ZIMBABWE’s biggest cables manufacturer said on Friday output rebounded in 2021 following steeper demand on the domestic market as the economy recovered from hard lockdowns rolled by in 2020.
However, the Zimbabwe Stock Exchange listed Cafca said in its 2021 annual report that foreign currency shortages confronting the economy delayed the firm’s expansion plans.
“The improvement in economic activity coming out of the pandemic lockdown saw volumes increasing from 1 744 tonnes in the prior year to 2 604 tonnes in the current year, an increase of 49%,” Cafca chairman, Honour Mkushi said.
He said growth was underpinned by sharper demand on the domestic market.
Governments worldwide have in the past two years announced lockdowns to fight the Covid – 19 scourge.
The pandemic has grounded economies and disrupted global supply chains, closed off major ports and triggered shipment delays and container shortages in the logistics sector.
Exporters have been hit by depressed demand, although in the past year, demand has crawled back, as the globe learns to live with the pandemic.
“Local demand picked up by 57% whilst exports increased by 16%,” Mkushi said.
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He said that the company was not anticipating any material changes in the environment locally or regionally.
As a result, the firm was expecting a moderate increase in volumes during the current year.
The firm’s managing director, Robert Webster, said its installed capacity remained at 250 tonnes.
He projected that the firm would be producing at 90% of its installed capacity during the current year.
However, investment into new plant was affected by foreign currency shortages, Mkushi added.
“No investment was made this year on new plant as all the foreign currency we could source was prioritised to procuring raw materials and spare parts,” he said. “The age of our equipment requires to have a significant investment in engineering spares and at the year-end we are carrying $63,8 million in engineering spares,” he added.
Webster said without an improvement in access to foreign currency by manufacturing firms, growth would remain lukewarm.
“Provided timeous availability of foreign currency, we are confident that volumes will grow in the coming year both in the local and export market,” he said.
About 95,8% of Cafca output was shipped to the domestic market, during the period.
Cafca manufactures and supplies cables for the transmission of electrical energy and information, primarily in southern and central Africa.
The company manufactures more than 900 cabling products.
It also recovers decommissioned cables for recycling and supplies telecommunication cables.
Cafca is a subsidiary of South African company CBi Electric African Cables.