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StarAfrica’s sugar production down 4 000 tonnes due to power shortages

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By Alois Vinga

LISTED sugar producer, StarAfrica Corporation Limited (SACL) production went down 3 744 tonnes in the firm’s first half ended September 30 2019 owing to choking electricity shortages obtaining nationwide.

Speaking during the presentation of financial performance recently, SACL chairman, Joseph Mutizwa said power shortages affected productivity.

“Our subsidiary, Gold Sugars Harare produced 32 047 tonnes of refined sugar compared with 35 791 tonnes produced in prior half year. The slowdown was due to the acute power shortages experienced in July and August 2019 which resulted in the factory shutting down for five weeks,” he said.

He said despite the power situation having improved after the establishment of a ring-fenced power supply arrangement, the tariff being charged under the scheme is too high.

SACL is one among many companies in the country whose production has been severely affected by the electricity shortages which have seen power cuts being experienced for around 18 hours a day.

The situation has prompted many firms to adopt solar energy or resort to payment of electricity in foreign currency but the situation still remains tough for manufacturing sector players.

Despite the obtaining challenge, SACL realised a turnover for the period under review amounting to $132.1 million compared with $28 million recorded in prior year comparative period.

The increase was on the back of changes in the product mix as well as the necessary inflation related price adjustments aimed at preserving the company’s ability to service the market.

Earnings before Interest, Tax, Depreciation and Amortisation went up to $19.4 million in comparison with $ 2.1 million that was achieved in the same period last year due to a combination of the increase in turnover and cost management measures which restrained growth in costs to below turnover.

SACL aims to pursue an aggressive export strategy to counter the challenges being experienced locally.

“The major growth strategy for the company hinges on export markets that include existing Southern Africa markets and Central and East African markets into which the company has just begun to make inroads,” Mutizwa said.