Published: 2 hours ago

Publicly traded conglomerate Amalgamated Regional Trading Holdings Limited (ART) is grappling with a challenging trading environment, with its latest performance report for the third quarter ended June 2025 highlighting declines across sales, turnover, and profitability.

The diversified group, operating in paper, stationery, battery, and timber manufacturing, has long been regarded as a bellwether of Zimbabwe's industrial sector. However, subdued demand, power shortages, and export pressures have weighed heavily on the company's operations.

Chief Executive Officer Milton Macheka disclosed that overall sales volumes fell by 7% during the quarter, while turnover dropped to US$7.8 million, a 23% decline compared to the same period last year. "Turnover for the quarter was US$7.8 million, largely due to reduced export volumes and power-induced product shortages. Export volumes fell by 32%, with margins further eroded by the reduction in the foreign currency retention threshold," he said.

The slump in exports reflects broader challenges for Zimbabwean manufacturers. Recent adjustments to foreign currency retention rules have compelled exporters to surrender a greater share of receipts to the central bank, squeezing margins and tightening cash flows amid rising global competition.

ART's difficulties have been compounded by the mothballing of its paper mill, which has generated significant closure costs and obligations. Macheka noted that environmental and market conditions did not support the viability of the mill, prompting consideration of discontinuation. "The mothballing of operations at the mill has resulted in material closure costs, significantly weighing on the Group's financial performance," he said.

Despite these setbacks, certain divisions remain resilient. Demand for batteries has remained strong due to Zimbabwe's energy shortages, while timber continues to find markets locally and regionally, buoyed by construction and furniture sectors. Macheka emphasized that these areas provide a foundation for rebuilding: "The Group remains focused on safeguarding liquidity and restoring profitability, underpinned by firm demand in batteries and timber, operational improvements, and disciplined cost management."

Looking ahead, ART is pursuing strategic partnerships and stakeholder engagements to bolster capital, technology, and operational efficiencies. "Management anticipates that ongoing discussions with potential partners and key stakeholders will be concluded by year-end," Macheka said.

Industry analysts note that ART's performance mirrors the broader challenges facing Zimbabwe's industrial sector, including inconsistent policy frameworks, chronic power shortages, high production costs, and subdued consumer demand. These factors continue to strain local manufacturers' competitiveness, both domestically and regionally.

As ART navigates this difficult landscape, its leadership remains committed to stabilizing operations and leveraging resilient divisions to drive recovery, underscoring the critical role of strategic partnerships and adaptive management in Zimbabwe's manufacturing sector.
- Business Times

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