Star Africa bosses bow out

HARARE - Star Africa Corporation (Star Africa) group chief executive Patison Sithole and chief operating officer Tendai Masawi have resigned from the listed diversified concern following a series of loss performances.

The resignations also come as the group has embarked on a restructuring exercise that is expected to end the bad patch and return to profitability while focusing on its core sugar refining business.

In a July 30 public notice, Star Africa said its board of directors had accepted the resignations.

“Sithole’s resignation is effective from August 31, 2012 while that of Masawi if from July 31, 2012,” the company said.

“The board is in the process of restructuring the company and recruiting a new chief executive and announcement will be made in due course.”

In its full results to March 3, 2012, the company recorded an after tax loss of $8,4 million compared to $1,1 million prior year after exceeding its borrowing limits by $10,8 million.

“The tenure of critical loan facilities was extended to an average of two years and interest rates were reduced to 12 percent and below. It is therefore expected that finance costs for the year ending March 2013 will be much lower,” chairman Passmore Matupire said.

The company’s woes were worsened by its discontinued operations which recorded a loss of $2,2 million compared to $9,7 million prior year.

“Of that amount, continuing operations recorded a loss of $6, 2 million compared to $7,4 million in March 2011,” he said.

The group’s financing costs for the period stood at $4,6 million compared to $5,7 million in the previous period. The company said it had approved an upgrade of its Goldstar Sugar Harare (GSH) plant in order to enhance profitability through increased volumes and production efficiencies.

Star Africa said the plant upgrade had already commenced and will be completed by March 2013.

“The plant upgrade will run concurrently with the existing plant thereby ensuring continuous production throughout the period of the project,” Matupire said, adding “it will also bring the latest sugar refining technology and world standards.”

According to the annual results, production at GSH grew 20 percent to 55 982 tonnes for the financial year under review compared to 46 515 tonnes prior year.

Production continued to be hampered by the age of the pant as well as erratic power supply.

The sugar producer has since entered into an arrangement for ring fencing with the utility supplier to guaranteed continued operations and reduction in process losses.

Matupire said its disposed, Red Star Holdings Limited, was in the process of listing on the Zimbabwe Stock Exchange pending addressing liabilities on its balance sheet while Red Star Wholesalers Private
Limited and R Chitrin and Company Zimbabwe Private Limited were undergoing liquidation.

According to the results, Star Africa’s industrial division posted a loss of $1,3 million compared $1,8 million loss the previous year.

Polyfilm Plastics, a manufactures plain and printed plastic bags and sheeting, was weighed down by working capital constraints which translated to lower volumes than expected while Highfield bag was affected by an ageing plant and equipment.

Bluestar Logistics, Star Africa’s transport unit, posted an operating profit of $575 000 compared to a $156 000 loss in 2011.

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