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Cape Town - Unlisted liquor producer KWV Holdings said it has a great opportunity to double its wine sales in SA.
Speaking at a results presentation on Thursday, CEO Thys Loubser said about 90% of KWV's wines - which include well-known brands like Roodeberg and Cathedral Cellar - are exported.
"We've only been in the local wine market for five years, and we still have to fight for shelf space. But we believe we have a great opportunity locally, and we would like to double sales."
Loubser said a larger local market for its wines would act as a hedge against currency fluctuations. KWV reported a R9.5m operating loss in the year to end-June 2009, a period in which the company's export revenues were hit by a stronger rand.
Loubser, however, stressed that a focus on local wine sales would not mean KWV would let up on its traditional export markets.
One export initiative, he said, would be to push brandy sales internationally - especially in existing markets in the UK and Canada. KWV sells the bulk of its brandy brands locally and only 7% is exported.
Loubser said KWV wines accounted for 27% of SA wine sales in Japan, 12% in Canada and 15% in Scandanavia. He said Roodeberg, which accounted for 60% of KWV's annual sales of R694m, was arguably SA's strongest wine brand.
"In Sweden one in five Swedes have drunk Roodeberg."
Loubser said KWV's newest brand, Café Culture, was also proving a big hit with consumers. "Café Culture has grown beyond all expectations. We ran out (of stock) this year, and we're doing our best to get it going again."
Loubser said the year to end-2009 was tough with KWV incurring a number of impairments (from the company's recent restructuring and unbundling) and suffering the effects of the global recession.
He noted that if KWV's performance was normalised (stripping out one-off items and events) the company would have produced a trading profit of R57m. "It's better, but still not good enough. I openly admit this."
Loubser said KWV, which now does not have the benefit of an earnings donation from former associate company Distell, aims to grow revenue by 15% and push trading margins over 10%.
- Fin24.com