Oliver Kazunga, Senior Business Reporter
ARISTION Holdings Limited has invested 50 percent of the proceeds received from the disposal of its shareholding in Claremont Orchards Holdings (Private) Limited in developing macadamia plantations and securing plant equipment.
Last year, the listed agro-industrial group announced that it had disposed of 50 percent of its shareholding in Claremont Orchards Holdings to a Netherlands registered firm, Tuinbouw Zonder Grenzen under a US$2 million deal.
Part of the reason behind the transaction was to raise capital for further investment into a macadamia nuts project in Manicaland province.
In a trading update for the first quarter ended December 31, 2021, Ariston said the proceeds of the above transaction were received during the period under review.
“The proceeds from the transaction were used to develop new as well as improve established macadamia orchards, expand macadamia drying facility and purchase equipment for automation of some processes to counteract the effects of shortage of labour in Chipinge,” it said.
The transaction has enabled the entry of a foreign shareholder who has undertaken to provide significant funding for expansion of Claremont orchards into high value fruit and flower offering primarily for the export market.
It is hoped that the sum of the two investments will provide Ariston shareholders with greater value than presently.
Regulatory approval for the transaction has been received.
Commenting on the weather pattern during the period under review, Ariston said: “Although the first quarter weather was cooler than prior year, rains were less and very late, with most rains only being received at the tail end of December 2021.
“In Chipinge and Chimanimani where the majority of our operations are located, 172mm of rain had been received in the first quarter to 31 December 2021 compared to 532mm received in the prior comparative period.”
It said operations in Chipinge and Chimanimani were relatively least affected by the changes in the weather pattern.
Irrigation was available, but was adversely affected by power cuts.
“Operations at Kent Estate were more affected as the dry-land planting could only be completed in late December 2021.
“Crops under irrigation at Kent were unaffected by the late rains.
“The effect of the late rains on dry land crops will be lower than optimum yields on dryland crops,” said the group.
However, Ariston said, improvements in selling prices are expected to make up for any decline in yield. Inflationary pressures and lack of disposable income continued to affect the operating environment.
“The widening of the exchange rate gap between the interbank auction rate at which 40 percent of the group’s export revenue is retained at and the exchange rate that suppliers are charging for locally purchased goods continues to put substantial pressure due to the mismatch in the two rates,” it said.
During the quarter under review, macadamia volumes were 20 percent ahead of prior comparative period.
“Macadamia harvest begins in March hence the minimal production levels.”
On its poultry side, Ariston said the unit produced on an out-grower model for the largest poultry producer in Zimbabwe.
And in the current period, the producer increased the number of placements thus resulting in higher production volumes.
Other products consist of potatoes, commercial maize, seed maize, soya beans, sugar beans and bananas.
“The category has continued to grow over the years with increasing significance to the group’s revenue and positive contribution to the group’s profitability.
“The continual growth is due to increased hectarage as well as improved production efficiencies.
“The group has continued to invest in more irrigation for this category thereby increasing the number of crops and times the fields are utilised in a year,” said the agro-industrial company. —@KazungaOliver