Crocodile skins and meat producer Padenga Holdings Limited is mulling diversifying into an alternative export-oriented business that should enhance the company’s export earnings.
Already, Padenga’s market is dominantly export.
In a cautionary, the company indicated it was looking into the proposed transaction, which if successful would not dilute the current existing shareholding of the company.
“Shareholders are advised that Padenga Holdings Limited is considering a proposed transaction to diversify its business through investment into an alternative export orientated business.
“This diversification will not result in dilution of existing shareholders of Padenga Holdings Limited.
“To this end, transaction advisors have been engaged and developments will be communicated to shareholders in due course. In the interim, shareholders are advised to exercise caution in dealing their Padenga shares,” said Padenga.
Last year, Padenga indicated it had plans to venture into agriculture, focusing on avocado and macadamia production in the Eastern Highlands.
Macadamia and avocado businesses are profitable businesses and experts say this would enhance Padenga’s earnings, already into exports of crocodile skins for luxury brands in Europe.
Diversification would also make sense for Padenga given that there are currently growth restrictions on the sales volume for crocodile skins where the company’s sole buyer can take approximately 46 000 skins per annum.
In Zimbabwe, the avocado and macadamia business is dominated by Ariston and Tanganda.
The major destination markets for Zimbabwe’s avocado exports in 2016 were Netherlands, United Kingdom, France and Germany accounting for 68,3 percent, 13,4 percent, 9 percent and 6,6 percent respectively earning the country $4,2 million in exports.
Rising demand in Europe and other countries such as China has created more growth opportunities as well as providing scope for companies to diversify into the business.
In 2016, the global avocado market registered sales revenue of about $12 billion. In 2017, it reflected a valuation a little under $13 billion and by the end of 2027, global market for avocados is estimated to touch a value of more than $23 billion.
On macadamia nuts, Zimbabwe was exporting more than 4,5 tonnes of nut in shell (NIS) as of 2017 with Ariston exporting approximately 1 500 tonnes NIS.
In 2016 was one of the best for the company in terms of prices, and exported macadamias fetched an average price of $3,60 per kg of NIS.
Across the globe, demand for macadamias has been particularly strong with the bulk of the produce destined for the export market, and as with many other things, China is the biggest importer of the nuts.
According to China National Industry Association (CSNC), the country the total sales of China nuts and roasted seeds reached $19,5 billion in 2016, up 10 percent compared with the year before.