TSL Sets Eyes On Regional Expansion

Source from:  The Herald (Harare) January 24, 2006  01/24/2006

AGRO-DEALER Tobacco Sales Limited (TSL) is aiming at establishing new operations in the Southern Africa region as a way of countering negative consequences of subdued domestic demand. Although the impact of this move is not expected to be immediately significant, it is, nevertheless, seen as an important building of blocks for the future. "The group is evaluating several initiatives to participate in the rebuilding of agriculture in Zimbabwe and is confident that these will bear fruit in the future," TSL said in a statement. In the trading year ending October 31 last year, the group registered an after-tax profit of $320,9 billion, with tobacco production increasing to 73 million kilogrammes from 69 million kg in 2004. The increase is mainly attributed to contract tobacco growing. Turnover increased by 261 percent over last year, owing to good performances at Agricura and Hunyani. The latter's export volumes increased by 31 percent as a result of the excellent performance by its Corrugated division. "A cost containment strategy effected during the year was highly successful at Agricura, though foreign currency shortages severely hampered its ability to achieve optimal performance," the listed industrial concern said. Fuel and foreign currency shortages affected volumes at Bak Storage whilst Agpy raised production by 40 percent due to open-pollinated varieties that were introduced, though a delay in the release of seed selling prices constrained the company's full potential. TSL said tobacco contract buying schemes resulted in a decline of auction sales volumes, but this was, however, mitigated by the depreciation of the dollar in the last quarter of the financial year. Subsequently the company ceded its contract tobacco rights to a local tobacco merchant and ended the year without any net foreign currency exposure. Cut Rag factory had a new cigarette-making machine installed, thus improving processing efficiency and significantly reducing wastage. A final dividend of $204,49 per share -- up from $51,41 -- was declared. TSL, however, voiced its concerns about the persistent shortages of fuel, fertilizer and chemicals and warned that if not rectified, tobacco production would decline in the coming season. Enditem