Michael Tome and Panashe Chikonyora
AMALGAMATED Regional Trading (ART)’s solar and Industrial batteries division recorded 12 percent volume increase for the year up to 30 September 2019 compared to the same period in 2018 on the back of power outages that saw domestic and business electricity consumers sourcing alternative sources.
According to ART the growth in this segment is also attributable to the need for constant energy supply to power operations particularly by mobile network operators and mining companies.
Solar and industrial batteries segment results are a pointer to the heightened need for alternative power given the sustained power outages.
The group noted that it could not provide and cover for the huge product demand owing to operational inefficiencies stemming from persistent pricing challenges, foreign currency shortages, working capital and inflationary pressures.
Presenting results at an analyst briefing recently ART chief finance officer Abisai Chingwecha, said the batteries and solar segment presents wide opportunities for the company hence the need to capacitate the division in terms of machinery in order to meet the demand.
“We are trying to exploit opportunities in solar and industrial segment, I know solar is topical but Industrials batteries that support your mines and your telecoms are on demand, so we are seeing bigger opportunities there,” said Mr Chingwecha.
Weighing in ART group chief executive officer Milton Macheka, indicated that the prevailing power outages had presented them a vast opportunity in the solar and industrial division.
He, however, acknowledged that the division needed to be further capitalised going forward to meet the looming demand.
“Demand for solar batteries was obviously reared by power inconsistencies, domestic power supply constraints. That side of the business is not properly capitalised, so because it is not properly capitalised, there is a supply gap going back many years and we are moving to capitalise it, now we believe that the strides that we are making in terms of retooling manufacturing facilities should see it bearing fruit,” Mr Macheka.
Meanwhile, ART’s overall volumes went down by 18 percent attributable to continuing liquidity constraints affecting the group’s trading across the business units.
In the period under review ART revenue increased to $267 million from $212 million realised in 2018 due to price increases effected in response to the increased cost of production.
Export volumes for batteries and paper increased by 4 percent and 7 percent respectively on the back of consistent product availability and increased selling effort in Zambia and Malawi.
Going forward ART said it is looking into improving operational efficiencies through development of new lines as part of future investments, which are aimed at growing exports necessary to boost the business which continues to be negatively affected by the country’s deteriorating economic conditions.
The investments include a new advanced paper mill, a timber dryer, expansion of industrial and solar batteries division and repositioning Softex to be a full hygiene business.