DIVERSIFIED agro-industrial concern, Ariston Holdings, is concentrating more on improving the quality of its tea products in order to boost export volumes.
The Zimbabwe Stock Exchange (ZSE)-listed firm is convinced that increasing export sales emanating from high-quality products will translate to higher profitability, which mitigates the effect of low performance.
In a trading update for the first quarter ending 31 December 2022, Ariston said results on the ground have shown that the strategy of improving product quality will improve overall tea performance.
“In this current year, the group has increased its focus on improving tea quality so as to grow its export sales volumes as the local economy is expected to continue to face headwinds,” said the company.
“This shift in focus will result in lower tea production than in the prior year in terms of overall quantity but will result in higher volumes of export-grade teas than in the previous year.
“Increased export sales will translate to increased profitability, which mitigates against the effect of the low performance of the local market on the group’s financial well-being.”
The group said in the period under review, it registered an increase in total tea sales volume from the prior comparative period.
This was due to the group having closed the financial year ended 2022 with some tea stocks, which were sold in the period under review.
With the global economy recovering from the impact of the Covid-19 pandemic, Ariston says the global shipping shortages have improved resulting in a 229 percent increase in export tea sales.
Local tea sales volumes registered a 102 percent increase in volume as demand from local customers improved.
Commenting on macadamia nuts, the company said there are minimal production levels as the harvest season begins in March.
The volumes for early drop macadamia nuts were 91 percent ahead of the prior comparative period.
“Although macadamia nut production volumes increased, sales volumes declined. This was due to the prior period having late macadamia exports, which didn’t occur in the current year,” it said.
Banana production volumes had a 14 percent increase from the prior comparative period due to the heavier rains received in the current period, it noted.
The company said during the period under review, the planting of potatoes was delayed to avoid losses normally experienced when the fields are too waterlogged for potato harvesting.
“As a result of changes in timing of potatoes, harvesting commenced in January 2023 whilst, in the prior year, harvesting occurred in December. Thus, the timing difference resulted in a 32 percent decline in production volume as of 31 December 2022,” it said.