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Wednesday, April 24, 2024
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Power Constraints Dampen Star Africa Production

The persistent power supply challenges dampened production for sugar refiner-Star Africa Corporation during the third quarter to December as it reduced plant time.

A number of companies have been affected by the ongoing electricity cuts which are likely to weigh down on profit.

In its Q3 trading update, the group which operates Goldstar Sugars said volumes of granulated white sugar were 0.4 percent lower than those attained during the prior year comparative period.

“Power and steam supply constraints were the main causes of the marginally reduced throughput, as they negatively impacted plant uptime. Consequently, the reduced production led to a 0.2% decrease in sales volumes, compared to prior year,” the company said.

Last year industry body, the Confederation of Zimbabwe Industries (CZI) said local firms were losing 30 percent of production time due to power outages at factories.

Star Africa subsidiary, Goldstar has also been battling for viability challenges owing to high cost of raw sugar from its supplier.

As a result, Gold Star has since temporarily closed its Harare refinery and sent employees on indefinite leave, in protest to Tongaat Huletts price increase and onerous trading terms.

“The business was already operating under untenable trading conditions that this supplier had imposed. The company has engaged the supplier and the Ministry of Industry and Commerce, with a view to agreeing to a price, as well as trading conditions that are viable and sustainable,” the company said.

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Meanwhile, Goldstar completed an overhaul programme of two of its five boilers.

In addition, the business installed an 11kVA dedicated electricity line, procured a 1,000kVA generator (for controlled plant stoppages, following power cuts) and electrical cables to mitigate power supply challenges.

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