Cafca optimistic about growth in 2022

14 Jan, 2022 - 00:01 0 Views
Cafca optimistic about growth in 2022

The Herald

Michael Tome Business Reporter

Cable manufacturer CAFCA says it is optimistic that its business will remain buoyant in 2022 driven by strong improved demand.

CAFCA has projected the demand for its product to grow by 3,85 percent to 2 700 tonnes from the 2600 tonnes in the prior comparable period.

The company said it was well positioned to meet the anticipated demand, given it already had a stock cover of three months in finished goods, which leaves the company way ahead in terms of requirement from the market.

Stocked finished products act as a hedging strategy particularly considering the inflationary environment prevailing in the country.

CAFCA also said it had secured loans and overdraft facilities amounting to $320 million, which have the potential to improve the company’s financial position to execute some of its operations. Company secretary, Caroline Kangara said the company had put adequate resources in place to match the anticipated volume growth this year. She, however, acknowledged the mounting pressure to consolidate market share in the region as competitors’ numbers and volumes continue to grow.

“The company’s management believes that despite Covid 19 the business will remain in operation for the foreseeable future. The company will continue operating as a going concern as demand for cable has remained firm with sales volumes projected to increase to 2700 tonnes from 2600 tonnes in the ensuing way.

“We have budgeted for a modest increase in volumes in 2021/22 against a background of uncertainty in the foreign currency availability and pricing as well as the impact of increased competition in our regional markets,” said Ms Kangara. In spite of the negative effects brought by the Covid-19 pandemic, the company has promised to take advantage of prospects that may arise in either the local or export markets through the adoption of adequate mitigating strategies against the challenging local economic environment as part of its future strategy.

CAFCA’s primary markets are in Southern and Central Africa, although it has an export footprint that stretches into the European Union (EU) and Russia.

About 95,8 percent of CAFCA’s produce in 2021 was consumed locally while the balance went to export markets.

Despite challenges presented by the Covid-19 induced lockdowns,  CAFCA said it was happy critical raw materials were still shipped without much interruption.

The Zimbabwe Stock Exchange-listed company manufactures and supplies cables and allied products for the transmission and distribution of electrical energy and telecommunications. It also manufactures over 900 cabling products to British and South African markets including 11KV XLPE cables.

CAFCA Limited also recovers decommissioned cables for recycling and supplies telecommunication cables ranging from indoor to underground as well as aerial self-supporting cables.

Established in 1947, CAFCA is a subsidiary of CBi Electric African Cables (South Africa) which is owned by Reunert Limited (South Africa).

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