Chemco narrows losses

HARARE - Chemco Holdings Limited (Chemco) narrowed its losses in the half year to April 2013 to $139 000 from $427 000 incurred in prior comparable period.

The agro-chemicals manufacturer and distributor — suspended from the Zimbabwe Stock Exchange in August last year — has been trading in the red since adoption of the multi-currency system in 2009.

Anthony Mandiwanza, the group’s chairperson, said Chemco’s revenue in the period under review declined by 27 percent to $2,3 million from $3,1 million.

“Despite the loss in revenue, the group loss before tax declined by 7,7 percent due to improved operational efficiencies following the restructuring exercise in the second half of 2012,” he said.

Last year, Chemco divested from three two loss-making divisions — Chemco Transport, Farm-A-Rama and Agpy — through a management buy-out.

Mandiwanza, however, noted that Chemco’s subsidiary Agricura Private Limited (Agricura) achieved an 18 percent increase in revenue and a profit before tax compared to the loss before tax incurred in the first half of the previous year.

“The company continues to benefit from the streamlining of cost structures implemented in 2012,” he said adding that Agricura’s trading performance was expected to surpass the previous year despite the prevailing liquidity crunch.

“The company is poised to take advantage of the increased activity in the agriculture sector,” said Mandiwanza.

Government recently pledged $161 million in agriculture input support for the 2013/14 season targeting 1,6 million mainly small-scale farming households as the country seeks to end years of perennial food shortages.

The country, once regarded as the breadbasket of Africa, has been struggling to feed its own people since President Robert Mugabe’s Zanu PF party embarked on a controversial land reform programme that displaced 4 000 commercial farmers.

Finance minister Patrick Chinamasa said each household will be given 50kg of Compound D and 50kg of ammonium nitrate (AN) fertiliser, as well as 50kg of lime and 10kg maize seed pack under the scheme.

Elia Majoni, a senior Agri Business Consultant with Farm Capital Ventures, said preparations for the 2013/2014 farming season were progressing well across most regions in the country.

“However, government must ensure that it delivers all the input it promised to farmers on time if we are to avoid being caught off side because the season is already underway now,” he said.

 

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