Listed spirits and wine maker African Distillers (AfDIS), has begun cider production after securing critical bottles supply security from South African and United Arab Emirates companies, an executive has said.
“We have started producing ciders at full throttle following procurement of bottles from Consol South Africa and Dubai,” managing director Stanley Muchenje said, adding that the “preferred cider is in abundance.”
Muchenje said AfDIS can now order as many cider bottle supplies following the Consol’s satisfaction of its own market. The company has started importing bottles from UAE, he said.
Business Times in March reported that AfDIS was battling serious cider bottle shortages.
The consumer staples concern is setting up a cider fermentation plant in Harare at a cost of US$1m.
The plant is expected to be complete by the end of the first quarter of AfDIS reporting period.
“The US$1m is mainly for hunters dry and hunters’ gold but other ciders can also be processed in that plant to cut costs,” Muchenje said.
He said the localisation of the ciders will reduce the company’s forex requirements and this will go a long way in cutting costs.
In its trading update for the quarter to December 31, 2021, AfDIS revenue grew by 57% for the quarter and 52% for the nine months in inflation adjusted terms over last year for the quarter and nine months respectively.
“This is as a result of volume growth emanating from firm demand over the festive season. The company continues to leverage on foreign currency generated from trade to ensure continuous supply of imported inputs and to contain supply chain costs,” AfDIS said.
Wine volume grew 67% largely driven by 4th Street due to improved availability and affordability following the local production project which was commissioned in the quarter under review.
Spirits and ready to drink volumes grew 17% and 41% respectively.
The trading environment for the quarter under review was stable and the relaxation of Covid-19 lockdown restrictions resulted in increased economic activity.
AfDIS said the consumers’ spending was further improved by increased activity in the key sectors of the economy such as agriculture, mining and infrastructure projects.
The country however experienced a fourth wave of Covid-19 towards the tail end of the quarter which resulted in some disruptions to business operations as it led to higher employee absenteeism during periods of high infections.
Foreign currency generated from trade continues to benefit the economy as it makes it easier to fund external supplies of raw materials and capital equipment.
Muchenje said the company will continue to benefit from its US$ sales and support from the shareholders.
He said management will continue to focus on strategies that grow market share and consequently enhance shareholder value