TANGANDA Tea Company has lost $6,5 billion due to the current foreign currency regime.
“The mandatory conversion of 25
% of export proceeds at $824 to US$1 reduced the group’s cash and earnings flow by some $6,5 billion,” company secretary Sam Magombedze said.
He said the exchange rate coupled with increases in the cost of inputs for its production had diluted the company’s financial rewards.
He said the situation had eroded the financial gains of the company from the favourable market rates which persisted.
“International tea prices for our exports were materially higher, compared to the same period last year. However, the financial benefit was diluted by the effects of input inflation and the fact that movement in the exchange rate did not match inflation,” said Magombedze.
He said tea production for the year was down to 6 992 tonnes compared to the previous year’s figure of 7 494 tonnes.
The situation, he said, was largely attributed to the shortage of plucking labour and diminishing rainfall.
“Diminishing rainfall during November and December affected production but the crop shortfall is mainly attributed to lack of plucking labour,” said Magombedze.
He said the situation had resulted in the company planning to invest further in mechanical harvesting machinery in the coming months.
“Further investment in mechanical harvesting equipment will be made during the winter months,” said Magombedze.
He said the company’s efforts to venture into macadamias were being hindered by the slow growth rate of the plants but maintained that the company was still going ahead with plans to plant 50 hectares of the nuts.
“Macadamias have taken longer to establish in our nursery than expected. We will commence planting of the initial 50 hectares at the onset of the rainy season,” said Magombedze.
He said the company’s beverage division had performed well with increased volumes and the situation was also improved with increased production in the factories.
He said the company’s export markets continued to grow, with marginal growth being recorded in Zambia and Namibia.
“Export of pocketed teas have grown especially into Zambia and Namibia,” said Magombedze.
He said the small-scale growers’ contributions continued to grow and the company’s plans to increase the out-grower scheme with emphasis on the resettled farmers.
The company recorded a turnover increase of 431% to $38 016 million compared to $7 161 million in the previous year.
Its exports turnover increased by 323% to $26 559 million.