Afdis targets regional markets

Wines and spirits maker African Distillers (Afdis) says it is close to reaching an agreement with its South African major shareholder, Distell, to take over distribution of ciders in Mozambique, Malawi and Zambia to utilise its new $5 million alcoholic beverages plant, chairman Joe Mutizwa says.

Afdis last month commissioned the plant, which increased production capacity by 59 percent to 20 million litres of ciders annually and Mutizwa said that it could easily meet demand in those countries.

“We are at an advanced stage of negotiations and we expect to start exporting to those countries in the current financial year,” Mutizwa said.

“For us it makes economic sense because those markets are currently being serviced from South Africa. But we have built enough capacity here to supply those markets.”

About 50 percent of the new production would be exported to Zambia, Mozambique and Malawi, he added.

Distell and Delta Beverages jointly own Afdis Holdings, which controls 60.50 percent of the locally listed distiller. Other shareholders include Old Mutual Life Assurance, Stanbic Nominees and the Mining Pension Fund.

Managing director Cecil Gombera told shareholders at the AGM that Afdis expects a ‘very good’ half year performance after volumes grew 20 percent in the first quarter to September and revenue grew by 18 percent.

“We witnessed a very strong first quarter. We hope to have a very strong performance in the first half of this year,” Gombera said.

Demand for ciders in October alone had shot up by 63 percent after prices went down by up to 30 percent when the company started producing them locally, he said.

“We passed on the benefits of producing locally to our customers in the form of price reduction and our products are now very affordable,” he said.

The outlook was that demand could increase in the second quarter to December in the festive period, he added.

In the full year to June, volumes grew 10 percent to 6.1 million litres and revenue rose to $24 million from $22 million. Net profit at $2 million was up 156 percent on the prior year. – The Source

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