Fradreck Gorwe, Harare Bureau 

TSL has upped preparations for the upcoming tobacco marketing season expected to start towards the close of the second quarter.

As part of preparations, the company has in the first quarter mobilised capital, both human and financial, as well as up-scaling technologies to smoothen the tobacco marketing operations.

“Capital investments, process refinements, testing and introduction of technologies along with customer training and awareness programmes in preparation for the start of the tobacco selling season, are undertaken during this period,” said company secretary James Muchando in a statement accompanying the first quarter trading update to January 31, 2020.

The tobacco auctioning division is also reportedly advanced in preparations, while adequate stocks of tobacco packaging materials for the marketing season in question are available.

“Tobacco Sales Floor ( a subsidiary of TSL) is well advanced in preparation for the tobacco marketing season, which is expected to start towards the end of the second quarter. The business continues to invest in upgrading its handling facilities to improve customer experience. 

“Propak Hessian commenced distribution of tobacco packaging materials at the onset of the first quarter achieving satisfactory volumes.
“Adequate stocks are available for the season,” reads the update.

The anticipated late start of the tobacco selling season is on the back of a dry start to the 2019/2020 cropping season that resulted among other things to late planting. Initial forecasts of a severe drought “were subsequently averted as rains were received midway through January 2020”.

Meanwhile, national tobacco volumes are expected to range between 10 and 20 percent below prior year due to the stated weather dynamics. Hope for an improved marketing season, though, is alive with the payment modalities in place.

“Payment modalities to tobacco farmers, which have recently been announced by the regulatory authorities, as in previous years, will play a significant role in the out-turn of the tobacco marketing season.”

Among the payment modalities announced by the Reserve Bank of Zimbabwe (RBZ), tobacco farmers shall be entitled to get their foreign currency dues without delay. 

The central bank issued a joint statement with the Tobacco Industries and Marketing Board (TIMB) that indicated farmers will now get their foreign currency entitlements as free funds that can be retained in the account for an indefinite period, an improvement on previous payment modalities.

TSL has realised satisfactory revenue and profit performance for the first quarter, the bulk of which came from the “supply of agro-inputs and provision of logistics and real estate services to various industries”. 

The Group also focuses on growing tobacco, maize, soya, bananas and chillies in its farming operations. 

The new 25-hectare banana plantation is reportedly doing well with volumes significantly above the same time in prior year.

Volumes supplied by Agricura went ahead of prior year as the group ensured adequate stocks were available throughout its wide distribution channels. Only in particular, product lines like fertilisers were volumes below expectation owing to the 2019/2020 weather patterns, a situation expected to improve into the second quarter with the coming of the rains. Supplies continue to the Command Agriculture Scheme.

Agricura reportedly imported and installed a sachet manufacturing line and an ampoule manufacturing line as part of a strategy to produce small pack sizes relevant to the market. 

This will see powders in pack sizes of 10 to 80 grammes and liquids in pack sizes of 4 to 50 millilitres being available on the market in the second quarter of 2020.

With regard to logistics, tobacco handling volumes were 42 percent up on prior year due to the extended tobacco processing season. The distribution division’s volumes grew by 59 percent as new customers were secured. Volumes in the ports business grew by 27 percent as more minerals were handled for existing customers. Further, new non-tobacco customers acquired in the quarter pushed Premier Forklifts’ volumes up 17 percent on prior year.

General cargo volumes handled, however, went down by 16 percent on prior year as warehouses for agro-inputs were still storing tobacco at the start of the quarter. Volumes in the freight forwarding and customs clearing were depressed due to poor access to foreign currency by the customer base.

Rental days improved by 5 percent as Avis acquired new buses to complement its existing fleet. Services to foreign travellers remains an important part of the business according to the group.

Regarding TSL’s real estate operations, progress is being made towards the planned construction of a huge warehouse. 

Demolition of an outdated 6 000 square metre warehouse to be redeveloped into a 10 000 square metre world class warehouse has commenced. 

The new warehouse is expected to be complete by the close of 2020. Occupancies for the quarter have marginally decreased by 1 percent from prior year owing to the development.