Harare - The falling rand is wreaking havoc on Zimbabwean companies, whether they are importing or exporting to South Africa, reports have shown.
In its report for the half year ended December 31 2013, National Foods, 30% owned by Tiger Brands, said operating profit was 5% lower after the Group reduced margins to counteract the flood of imports from South Africa.
Management said the dramatic weakening of the rand against the US$ has enabled South African millers to marginally cost product for sale into the Zimbabwe market.
“Gross margins declined 1.1% as the Group priced products to hold volumes in a fiercely competitive market place ,” said the group’s chairperson Todd Moyo, as Zimbabwean companies face increased competition from South Africa.
Exporters are also being affected by the falling rand with another Zimbabwean company Turnall saying it had scaled down exports of fibre cement to South Africa as prices were not good enough in the wake of the depreciating rand.
Managing director John Jere said his company was currently in negotiations with customers that are willing to offer prices that will sustain the company’s operations.
He was quoted by The Herald saying his company was in negotiations with customers in South Africa that are willing to offer reasonable prices.
Platinum miners such as Zimplats are likely in the same boat as they export their unprocessed ore to South Africa. The falling rand will certainly affected turnover.
In its report for the half year ended December 31 2013, National Foods, 30% owned by Tiger Brands, said operating profit was 5% lower after the Group reduced margins to counteract the flood of imports from South Africa.
Management said the dramatic weakening of the rand against the US$ has enabled South African millers to marginally cost product for sale into the Zimbabwe market.
“Gross margins declined 1.1% as the Group priced products to hold volumes in a fiercely competitive market place ,” said the group’s chairperson Todd Moyo, as Zimbabwean companies face increased competition from South Africa.
Exporters are also being affected by the falling rand with another Zimbabwean company Turnall saying it had scaled down exports of fibre cement to South Africa as prices were not good enough in the wake of the depreciating rand.
Managing director John Jere said his company was currently in negotiations with customers that are willing to offer prices that will sustain the company’s operations.
He was quoted by The Herald saying his company was in negotiations with customers in South Africa that are willing to offer reasonable prices.
Platinum miners such as Zimplats are likely in the same boat as they export their unprocessed ore to South Africa. The falling rand will certainly affected turnover.