The Sunday Mail
Livingstone Marufu
LISTED agro-industrial concern, Ariston Holdings Limited has invested $3,5 million in rehabilitating and expanding its irrigation schemes in a bid to mitigate the effects of the inclement weather conditions, particularly at its predominantly rain-fed agricultural estates.
Last year, the company recorded a loss of $1,7 million for the full year to September 30, 2015 on soaring finance costs.
However, the group believes that aggressive cost-cutting measures and the increased use of irrigation schemes will help put its projects on the mend. Last week, Ariston Holdings group chief executive officer, Mr Brian Kagondo said there is need to focus on irrigation rehabilitation as natural rainfall patterns are no longer predictable. Dry land cropping has also been temporarily shelved.
“The Ariston Board has always been aware that reliance on rain-fed agriculture is risky. Therefore, the group invested over US$3,5 million in a purposeful programme to rehabilitate and expand irrigation since the capital raise.
“To date, more than 65 percent of the group’s key crops are under irrigation.
“The irrigation system is mainly configured for micro-jet irrigation which enables efficient usage of the water.
“Drought has been severe with Claremont Estates receiving 33 percent of normal rains and Chipinge with 50 percent.
“Further, the rains started very late around mid-December and temperatures were very high, which was a problem, especially with tea.
“Kent received 30 percent of normal (sic) and so erratic that the dry land cropping programme has been temporarily abandoned, pending review as the season unfolds,” said Mr Kagondo.
The group currently has six strategic business units scattered around Zimbabwe – Blended Tea Factory (Chipinge), Claremont Estate (Nyanga), Clearwater Estate (Chipinge), Kent Estate (Norton), Roscommon Estate and Southdown Estate (Chipinge). Ariston, which is mainly involved in the production of tea, macadamia and poultry products, has embarked on a replanting exercise in all ageing orchards. At Claremont, over 50 percent of the apple orchards and 80 percent of the peach orchards have been rehabilitated, with new varieties planted in the process.
The year 2016 is the first season where orchards planted in 2012-13 are beginning to make a contribution. In Chipinge, there has been 100 percent rehabilitation of the macadamia orchards since the capital raising exercise.
It is forecasted that the rehabilitation of the orchards will reduce the cost per unit of production as volumes and quality increase.
Ariston’s farming business is largely profitable, with the Southdown Estates contributing about 76 percent of the group’s revenue at $9 million.Last year, the company’s board elected to close the perennial loss making trading business — FAVCO.
Added Mr Kagondo: “2016 will focus on growth by way of improving the operational efficiencies of the orchards and aggressive cost-containment strategies.
“Improved value will be extracted from macadamias (which make up over 40 percent of group contribution) with upgrades in post harvest management. We also anticipate slightly improved tea prices from the response to our attainment of Rainforest Alliance certification in 2015.
“The crop will be down as a result of the drought, but the margin per metric tonne will increase.”
