The Sunday Mail
Livingstone Marufu
ZIMBABWE Stock Exchange-listed cable manufacturer CAFCA has increased output from 200 tonnes to 300 tonnes per month by cutting margins, vigorously exporting and pushing the factory to a 24-hour cycle.
While other companies are downsizing, the country’s sole cable-maker – which exports to Malawi, Zambia and South Africa – has been recruiting, bringing in another 25 skilled employees this year.
CAFCA group secretary Ms Caroline Kangara, in a statement accompanying the company’s 2015 financial results, said the entity was benefiting from economies of scale.
“The strategy for the year was to push volumes and turnover and take the company from 200 tonnes a month to 300 tonnes a month. This we achieved by cutting margins, vigorously exporting and pushing the factory on a two-by-12 hours shift basis,” she said.
“As a result, our volumes grew by 39 percent whilst turnover increased by 24 percent year on year. However, the turnover growth was not in line with the volume growth as we reduced selling prices and increased exports at lower selling prices.
“We have increased finished goods stocks significantly from 250 tonnes to 500 tonnes in an effort to clear the stockpile of copper we had received on the barter deal with Zimbabwe Electricity Transmission and Distribution Company (ZETDC).”
Profit for the period under review stood at US$1 796 524 while operating profit dropped to 8,3 percent of sales mainly due to the drop in margin which fell 5,5 percent.
Profit before tax decreased 8,7 percent to US$ 2 452 551 from US$ 2 685 391 the previous year. CAFCA, also listed on the Johannesburg and London bourses, makes over 900 cabling products, including 11 kilovolt cross-linked polyethylene insulation (XLPE) cables. The company also recycles decommissioned cables.
