2019 REVIEW OF OPERATIONS: SCHWEPPES HOLDINGS AFRICA LIMITED

Schweppes Holdings Africa through its main operating entity Schweppes Zimbabwe Limited is a manufacturer and distributor of non-carbonated, still beverages under licence from The Coca-Cola Company. The product portfolio currently includes cordials, fruit juices, bottled water and iced tea.

The Company has value chain investments in the form of BeitBridge Juice Company which processes fruit juices mainly oranges and Best Fruit Processors which produces tomato paste for both local and export markets.

The entity recorded 20% increase in group revenue for year to December 2018 which reflected improved volume performance and increases in wholesale prices. The beverages volume grew by 6% driven by increased water capacity, introduction of the Fruitade range of cordials at BeitBridge Juicing Company and higher exports of juices, cordials and value-added products.

The Company was granted rights to export Mazoe Orange Crush and Minute Maid Juices into regional markets. The processing divisions benefited from improved supply of processing fruit as the company supported farmers with inputs and extension services.

The Company could not fully exploit the market opportunities arising from the limited availability of other beverages due to the constraints in accessing foreign currency. The shortages of foreign currency became more pronounced from October 2018. Sales volume in the quarter to March 2019 declined by 20%, reflecting the fall in aggregate demand due to rising inflation and loss of value of the local currency.

Financial performance improved significantly due to the turnaround in the performance of the processing divisions.
The company is expanding its outreach into downstream agricultural activities through direct cultivation of processing fruits such as tomatoes and support of community farming projects. The Company has partnered other funders to support the Shashe Citrus Outgrower Scheme in Maramani Communal
Lands, Beitbridge District where 200 families have established a 90-hectare orange plantation. The farmers have been introduced to inter-row cropping to grow other crops such as sugar beans or vegetables between the orange trees. The project is expected to reach 7 000 tonnes of oranges per year in 2020.