ZSE-Listed spirit and wine maker, African Distillers Limited (AFDIS) says localized production of import brands is now imminent as works on its US$1 million cider fermentation plant which took off last year is nearing completion.
The strategy is part of the company’s broader objective of cutting down costs and retention of foreign currency by producing these import brands locally on franchise basis.
“The business is investing in new capacity to improve efficiencies and reduce production costs while engaging relevant authorities to address compliance issues,”
“Capital projects to localize some imported products are at advanced stages of implementation, said company chairman Matlhogonolo Valela on the group FY22 results.
The company has been facing serious competition from the widespread sale of illegal alcohol which has flooded the market. Some of the major brands being found on the market include imported brands which are either counterfeit or smuggled authentic bottles.
The company intends to produce imported products such as 4th Street wine, which is mainly imported from SA among other brands and currently produces others such as Hunters ciders.
“In the last quarter of the year, growth in the RTD segment was severely curtailed by the regional shortage of glass which led to supply shortage with the Hunters’ brand being the worst affected,” said Valela.
However, the company recently introduced the Gold Blend Number 9 which has been well received in the market thereby impacting positively on the performance of brown spirits.
The group posted a 36 percent volumes growth which translated into revenue growth for the year at ZW$8,7 billion driven by firm demand. Operating income was ZW$1,8 billion.
“Management continues to focus on revenue and probability growth opportunities through product innovation, market share protection, production efficiencies and cost containment,” said Valela.