eBusiness Weekly
Michael Tome
CFI Holdings says it expects sustained demand for its products in the retail segment into the year banking on consumer spending on farming, construction and mining activities.
According to the diversified agri-business concern, the anticipated aggregate demand is despite the ongoing economic headwinds currently experienced in the form of high inflation levels and unsettled foreign currency exchange rates.
Zimbabwe’s month-on-month inflation rate in February 2022 was 7 percent, gaining 1, 7 percentage points on the January 2022 rate of 5, 3 percent while the year-on-year inflation rate (annual percentage change) for the month of February 2022 as measured by the all-items Consumer Price Index (CPI) stood at 66, 1 percent from January’s 60,6 percent.
The Reserve Bank of Zimbabwe has since projected inflation to close the year at 35 percent, having enunciated a Monetary Policy Statement that intends to stabilise the currency exchange rate and reduce inflation to low and sustainable levels in 2022. But players in the market suggest otherwise on inflation figures.
However, the CFI says it is pinning hopes on continued engagement between relevant authorities, industry, and business players in safeguarding economic progress that was attained in 2021.
“The board is encouraged by the positive trajectory the economy is on; and hopes that the on-going collaborative dialogue between Government, industry and other stakeholders will be maintained in order to safeguard business confidence and the significant economic achievements attained since the introduction of the auction system,” said Panganayi Hare in a statement accompanying the trading update for the first quarter to 31 December 2021.
The Agribusiness concern has also made progress in resuscitating operations of its milling subsidiary, Victoria Foods after capitalising the unit in the course of the period under review.
Victoria Foods together with its sister company Agrifoods, surfaced from judicial management placement in 2016.
This comes on the back of a 17 percent surge in sales volumes in the first quarter of the year to December 2021, which CFI Holdings attributed to “enhanced construction activities and payments of bonuses and salaries in foreign currency”.
Resultantly, there was a corresponding growth in revenue, closing the quarter 65, 7 percent better than the prior comparable period at $5, 25 billion in inflation-adjusted terms.
The growth in the company’s volumes was also attributed to improved agriculture performance in 2021 and a surge in construction endeavours during the year.
However, the delay to the start of the 2021-22 rain season decelerated volumes growth in the quarter under review.
The retail segment contributed 87 percent of the revenue a 10 percent decline from a 97 percent contribution made in the first quarter in 2020.
As part of efforts to bolster the group’s operations earlier this year, CFI Holdings Limited indicated that it will be prioritising the construction of low-cost housing in Harare South in support of the Government’s vision to curb the ballooning housing backlog and delivery of adequate housing by 2030.
CFI Holdings operates Victoria Foods, Farm and City, Glenara Estates, Langford estates, Suncrest, Agrifoods and Crest poultry.
