Ariston optimistic about 2024 prospects
DESPITE facing some challenges related to inflation and exchange rate volatility in 2023, horticulture concern Ariston Holdings Limited is optimistic about its prospects for 2024, leveraging on identified growth opportunities.
According to the Zimbabwe Stock Exchange-listed group, these include value addition, especially in macadamia nuts, evolving technologies, investments in solar energy as well as expansion of the poultry unit.
The group indicated there is scope for expansion of its poultry division as it seeks to diversify earnings and risk at a time of global commodity price volatility, exchange rate instability, and bad weather patterns affecting crop production.
During the financial year to September 30, 2023, the group swung into a loss of $33 billion from a profit of $5,9 billion in the previous year. Ariston said the loss was mainly driven by unrealised exchange losses arising from liabilities denominated in US dollars.
However, in terms of prospects, Ariston sees opportunities in the poultry division. The company has implemented an outgrower model, which involves partnering with small-scale farmers, aiming to significantly increase production capacity.
This initiative is expected to not only boost revenue but also create employment opportunities within local communities. This expansion, however, will be subject to securing the necessary funding for capital programmes.
Ariston is also exploring several other growth opportunities. For instance, the company recognises the potential of its fallow land within its estates and plans to cultivate macadamia nuts, avocados, bananas, and other horticultural crops. This diversification will spread risk and potentially generate new revenue streams.
Ariston also acknowledges the importance of technological advancements and is actively researching new techniques to optimise tea production. The successful implementation of these technologies could lead to the company becoming a low-cost producer, further improving its margins on tea sales.
To maximise returns from macadamia nut production, the company is considering installing a cracking plant. This value addition will enable the group to capture a larger share of the market value.
While Ariston is optimistic about 2024, it acknowledged the ongoing economic uncertainties in Zimbabwe. The company's success may likely depend on its ability to effectively manage these challenges, including potential currency fluctuations and supply chain disruptions.
In addition, the company’s investment in solar energy, through the installation of a solar plant at Southdown Estate, Chipinge, aligned with Ariston’s strategy of environmental sustainability and energy self-sufficiency.
This 1,2-megawatt plant, integrated into ZETDC with net metering, not only brings financial savings but also aligns with the company's commitment to renewable energy sources. While bad weather was projected for the 2023-24 agricultural season resulting in lower than normal rainfall, Ariston has put in place measures to cushion its operations against bad weather.
“The group will have to rely heavily on its irrigation systems in mitigation. Dryland activities will be kept at a minimum. It is hoped that the extremely hot conditions will not persist for the duration of the entire season,” said the group.