Starafrica narrows losses

HARARE - Hard-pressed Starafrica Corporation (Starafrica) narrowed its losses to $12 million in the year to March 2014 from $16,4 million incurred prior year.

During the period under review, operating losses went down to $5,48 million from $6,4 million.

Net finance costs declined to $4,78 million from $5,32 million.

This comes as the listed diversified group is still struggling to find buyers for its Tongaat Hulett Botswana (Tongaat) stake and transport subsidiary Bluestar Logistics.

The group was ordered by the High Court in August last year, under a scheme of arrangement, to dispose the investments within six months.

Proceeds from the sale were to be channelled towards settling debts amounting to approximately $20 million.

“What is outstanding is the disposal of Bluestar Logistics and the company’s 33,3 percent shareholding in Tongaat Hullet Botswana (Pty) Ltd, where efforts continue unabated to conclude these transactions at fair values,” said Starafrica’s chairman Joe Mutizwa.

This comes as the group invested $5,5 million in a new plant at Goldstar Sugars Harare (GSSH) that is set to revive its sugar business operations.

Mutizwa said that re-commissioning tests, dry and wet runs were in progress, with commissioning anticipated for completion in the second week of August 2014.

“The upgraded plant will increase production capacity from 300 tonnes per day to 600 tonnes per day.

“This will also result in improved sugar yield, quality and operational efficiencies, in addition to bringing the latest sugar refining technology and world standards at GSSH,” he said.

He added that as a result, GSSH will be able to consistently satisfy refined sugar requirements for all domestic market segments and have a surplus to export.

The group, however, still carries massive borrowings of around $37 million.

Mutizwa noted that production was adversely affected by an eight month plant shut down due to the implementation of the plant upgrade.

In the same vein, sales volumes were adversely impacted by low production volumes, consequent upon the eight month plant shut down.

“The inflow of lower priced imported sugar on to the domestic market compounded the situation.

“We are grateful to government for the duty structure put in place in respect of imported sugar as this has gone a long way in stabilising the domestic sugar market,” said Mutizwa.

He added that Goldstar Sugars Bulawayo (GSSB) remained under care and maintenance during the year under review.

In the group’s outlook, Mutizwa said they are confident that the later half of 2014/2015 will see a positive performance on account of the upgraded plant at GSSH, on-going cost reduction measures and a stable domestic market for sugar.

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