By Staff Reporter
In 2024, government introduced a tax on added sugar in beverages, initially at US$0,002 per gramme of sugar, but later reducing it to US$0,001 per gramme following industry concerns.
This tax is applied to both ready-to-drink and cordial beverages and the revenue is earmarked for the healthcare sector, specifically for cancer treatment and equipment procurement.
In a statement accompanying financial results for the year ended March 31, 2025, Starafrica chairman Rungano Mbire said the firm achieved a profit of ZiG339,7 million on the back of lowering prices to stimulate demand.
鈥淲hile we reduced prices to be competitive against imports and anticipate realising the benefit in the upcoming year, demand for industrial sugar in general is weak as some of our key customers in the beverage sector suffered from the negative effects of the added sugar on beverages tax,鈥 Mbire said.
鈥淎 projected record tobacco harvest and rising gold prices should further enhance foreign exchange inflows and support currency stability. While the 鈥榮ugar tax鈥 remains a headwind, we will continue to advocate, through the Zimbabwe Sugar Association, for policy refinements that support the local industry.鈥
Mbire said the firm was also hopeful that the recent inclusion of white sugar on the list of products attracting 30% surtax will provide necessary protection against the dumping of sugar by regional producers.
During the period, group revenue increased by 22%, rising to ZiG1,710.2 million from ZiG1,405.8 million in the prior year driven by increased sales volumes at their Goldstar Sugars and Country Choice Foods divisions.
Gross profit at ZiG339,7 million was achieved even as the firm lowered prices to stimulate demand, 鈥渄emonstrating the tangible benefits of our ongoing cost optimisation initiatives and value chain collaboration鈥.
Consequently, the group鈥檚 operating loss saw a significant reduction, narrowing to ZiG79,8 million from ZiG501,5 million in the comparative period.
They concluded the year with a loss after tax of ZiG129,4 million.
The group recorded a rise of 7% in sugar refining operations and a 14% in specialty products division.
鈥淥ur sugar refining operation recorded a 7% growth in sales volumes, with granulated white sugar sales increasing to 59,613 tonnes,鈥 Mbire said.
鈥淭his performance is particularly encouraging given the subdued trading environment in the latter half of the year.鈥
He said the firm resolutely focused on enhancing our value proposition to customers.
鈥淥ur specialty products division achieved a 14% growth in sales volumes, which rose from 1,244 tonnes to 1,416 tonnes. This success was driven by strategic adjustments to our market approach and enhanced value offerings.鈥
The Starafrica chairman added that the company was implementing further process refinements to counter competition from imported products and continuously diversifying its product portfolio.
Starafrica properties business also contributed positively to its year profit with rental income increasing to ZiG9,5 million, recording a ZiG1,9 million rise from the previous year.
鈥淭he Properties Business delivered steady returns, with rental income increasing to ZiG9,5 million from ZiG7,6 million in the comparative period, largely due to upward rent reviews. Our associate, Tongaat Hulett Botswana, also contributed positively, with our share of profit amounting to ZiG9,0 million for the year.鈥 鈥 News Day