CFI lauds forex auction system

14 Jan, 2022 - 00:01 0 Views
CFI lauds forex auction system There was an increase in Farm and City’s sales volumes for the year to September 30, 2021

eBusiness Weekly

Enacy Mapakame

CFI Holdings Limited’s retail division- Farm and City Centre (FCC) says the introduction of the foreign currency auction played a big role in the retailer’s ability to efficiently source merchandise, resulting in an increase in sales volumes for the year to September 30, 2021.

The Reserve Bank of Zimbabwe (RBZ) re-introduced the foreign currency auction system to improve the availability of foreign currency on the official market to meet local industry needs. This came as part of measures to address foreign currency shortages, cited as one of the major challenges that affected industry capacity, as some businesses were forced to source the precious greenback on the illegal parallel market at a premium.

For FCC, the auction system helped in enhancing not only product availability, but product range.

“The introduction of the foreign currency auction system and the use of the United States Dollar (USD) as a mode of payment reinforced stability and assisted the business in sourcing various merchandise efficiently,” said CFI chairperson Itai Pasi in a statement accompanying the group’s financials for the year.

FCC said key revenue drivers’ sales volumes improved by 84 percent relative to the prior period, due to a resurgence in construction activities, the relatively good 2020/2021 rain season, and an improvement in product range.

According to the group, the improved performance is also accredited to growing demand for Agrifoods’ stockfeed lines after its exit from judicial management in the prior year which saw stockfeed sales volumes double during the year on recoveries in lost market share and encouraging success in targeted medium to large scale commercial farmers.

During the year, FCC opened new branches in Msasa and Masvingo, reopened Nyazura and Chipangayi branches, and refurbished the Bindura and Zvishavane branches in order to increase the trading space and range.

The Harare Kenneth Kaunda branch has been converted into a Builders City and will open its doors to the public in the second quarter of this financial year.

CFI’s retail operations remain the group’s cash cow accounting for 91,4 percent of total revenue for the year under review while milling operations (Victoria Foods) contributed 4,9 percent, and farming operations contributing 3,7 percent to the group’s turnover.

Overall, the economic environment was , however, restrained by the impact of the Covid-19 pandemic as the country traded under varying degrees of lockdowns throughout the year. This resulted in reduced trading hours which had a knock-on effect on many businesses.

“Fortunately, for the greater part of the year, the group’s businesses operated under normal trading conditions,” said Pasi.

The group registered an average 80 increase in volumes sold in most of its key product lines. Total revenue jumped 76 percent to $9,2 billion from $5,2 billion and the increase was partly attributable to aggregate demand improvement during the period following a good 2020/21 summer cropping season and a better 2021 tobacco season as disposable incomes improved.

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