Nelson Gahadza
Listed companies are yearning for improved operating environment in 2025 that they hope will extinguish recurring challenges such as exchange rate volatility, a slow start to the 2024/25 agricultural season, power supply constraints and limited access to affordable banking facilities.
They also believe Government policies aimed at curbing the rate of inflation will not falter, helping companies realise their full potential.
In Zimbabwe, companies are listed on the Zimbabwe Stock Exchange (ZSE) and the US dollar-denominated exchange, the Victoria Falls Stock Exchange (VFEX).
Through their recent financial statements, the companies are cautiously optimistic of a better business operating environment and will, in the meantime, focus more on containing costs to sustain operations.
Sugar manufacturer, Starafricacorporation, said the 2025 National Budget’s failure to categorise industrial granulated white sugar to standard rating for value-added tax (VAT) purposes poses a significant threat to the local sugar industry, as the status quo translates to higher costs and selling prices.
“The business, through the Zimbabwe Sugar Association, will continue to engage the authorities to find a lasting solution to protecting the local sugar value chain from sugar dumping by regional producers.
“Star Africa will continue to navigate the challenges through strategic adjustments, cost optimisation, and engagement with relevant authorities to advocate for a conducive business environment,” said chairperson Rungamo Mbire in a statement of the financials.
Amalgamated Regional Trading Holdings (ART) said it remains confident that the ongoing restructuring efforts and decisions taken will see the gradual strengthening of the group and increased agility in taking advantage of opportunities identified in all its business units.
“The drive to contain costs will be maintained and emerging new technologies will be embraced across the units to ensure our product offering and services continue to meet the needs of our customers.
“The prevailing high interest rates and power supply challenges remain of concern, hence the use of offshore trading facilities and maintenance of the regional market thrust in our strategic growth initiatives,” said Dr Thomas Utete Wushe, the group’s chairman.
ART manufactures and distributes products in three key categories: paper products, stationery and batteries. Its product portfolio is diverse, ranging from tissue paper, sanitary ware and disposable napkins to writing pens and automotive, solar and standby batteries.
Dairibord Holdings chief executive officer Mercy Ndoro said the business will in 2025 continue with its growth agenda with particular emphasis on enhancing processing capacity through capital investments aimed at expanding market reach and augmenting sales volumes.
Dairibord, the largest milk processor in the country, has been investing in capacity enhancement to support its growth ambition under a US$24 million capital expenditure programme.
“Commitment to innovation, dedicating significant resources to research and development, with the objective of growing a robust and diversified product portfolio, will be a key focus,” Ndoro said in emailed responses.
She added that the group will implement market expansion with a deliberate, concerted effort on export growth.
“Rigorous cost management strategies will also be implemented across the business to optimise operational costs,” said Ndoro.
Businesses in 2024 flagged many factors affecting their operations but continued to find ways to manoeuvre the difficult space to foster growth and make further investments.
Dairibord Holdings, which operates in the beverage segment, highlighted that the implementation of a per-gramme sugar tax on beverage products resulted in a direct and quantifiable increase in production costs, as sugar is a significant and essential raw material in the manufacture of beverages.
“The cost of production has significantly increased, making Zimbabwean products uncompetitive, and there is a significant risk that the beverage industry as a whole will become uncompetitive compared to our neighbouring countries,” she said.
Ndoro said Zimbabwe’s sugar (sin) tax, currently the highest within the Southern African region, has demonstrably exacerbated price sensitivity among consumers within the beverage sector.
In addition, Ndoro highlighted that the high tax burden, such as the introduction of a sugar tax, disallowed value-added tax (VAT) claims on milks and other basic commodities, and the Intermediated Money Transfer Tax (IMTT) increase on USD transactions, placed a higher tax burden on industry.
She said the Government must consider, at the very least, designating sugar tax and IMTT as allowable deductions for tax purposes.
Business, on the other hand, has over the years grappled with the high cost of power and supply deficit.
Ndoro said to facilitate the transition to more sustainable energy sources, Governmental subsidies for industrial entities are recommended.
National Tyre Services (NTS) believes Government efforts and strategic initiatives towards Vision 2030, will drive a spate of developments across a number of sectors of the economy; consequently, tyre usage will rise.
“In the meantime, we hope that the country’s power utility will continue to prioritise availability of power to industry,” it said.
NTS said availability of electricity will minimise factory operating costs. The company said it has a huge customer base and is establishing a model of improved competitiveness to offer satisfactory service through stock availability across all its branches.
Brick manufacturer, Willdale, said the boom in the construction industry is also expected to persist in the coming year, providing opportunities for volume growth.
“Our strong brand and consistent focus on quality products should give us a competitive edge. We expect to raise the required funding for the upgrading of the production plant from the various initiatives that are already in motion,” the company said.
It said suitable strategies have been adopted to remain profitable in the face of competition and a shifting business model.
However, Willdale said competition will continue to stiffen as existing players and new entrants jostle for available projects and will also continue in lobbying for a fair operating environment.
Stock broking and equities research firm IH Securities said Innscor has secured enough white maize in its pipeline to the next harvest, thereby guaranteeing supply of raw material for products in its portfolio.
Business analyst, Kudakwashe Mundowozi, said for companies to defend against declines in turnover and profitability, businesses can implement several strategies that include diversification.
“Cost management is another critical strategy; hence, companies should implement cost-cutting measures by optimising supply chains and reducing operational costs.
“Implementing stringent cost control measures and improving operational efficiencies can help maintain profitability, and local sourcing is also beneficial,” he said.
Mundowozi said by investing in digital technologies, companies can improve operational efficiency and customer engagement.
The Zimbabwe National Chamber of Commerce (ZNCC) in a recent survey report, said in order to give industrial support, the central bank should move away from blanket incentives to sector-specific tax incentives that target firms creating additional employment to cater to each economic player’s needs to boost the rural industrialisation agenda and attract and retain foreign direct investment.
ZNCC noted that particularly the manufacturing sector in Zimbabwe is in need of serious retooling to modernise their equipment in order to be competitive.
