Labour shortages weigh down on Meikles Tea production
By Wellington Zimbowa
ZIMBABWE Stock Exchange Limited (ZSE) listed, Meikles Limited has reported a 15 percent export drop with tea harvesting being affected by labour shortages in its recent trade update.
The US$ 282.2 million capital, according to the African Financials listed company is invested in hotels, retail and agriculture sectors, with the latter, involving tea production in Chipinge through its subsidiary Tanganda Tea.
“For the agriculture segment, bulk tea production and export sales for the quarter were 15% below the same period of the previous year. Tea harvesting was affected by the limited availability of labour.
Most of the available labour was assigned to harvest macadamia nuts and avocados during the period under review. The segment will invest in motorised tea harvesting machines as the shortage of labour is bound to recur during the same period going forward,” said the company in its update.
Previously, the company courted the ire of child rights activists and development agencies for its incorporation of children, specifically for tea picking under as its corporate social responsibility programme of work and earn meant to cater for vulnerable children proved unpopular, resulting in its termination in 2015.
The company now intends to invest in motorised labour.
While reporting a positive performance in other portfolios due to improving foreign currency supply due to the official exchange market and retained inflationary pressures in its overall operations, the company, however, notes that labour challenges are set to continue.
“Trading environment during the quarter ended 30 June 2021 was characterised by sustained disinflation that commenced in July 2020 attributable to the exchange rate stability and improved access to foreign currency by manufacturers of goods. COVID-19 lockdown restrictions during the period under review were moderate in comparison to the hard lockdown during the same period of last year. Resultantly, sales volume growth was achieved across Group operations in comparison to the same period last year,” the group said.
Meikles posted a 21% and 198% group revenue shot in inflation-adjusted terms, with the agricultural segment classified as a discontinued operation and an asset held for distribution.
However, revenue for the agricultural segment was 41% and 248% ahead of the same period of the previous financial year in inflation-adjusted and historical cost terms respectively.
Through its TM and Pick n Pay retail chain stores, supermarket volume sales increased by 21% for the quarter relative to the same period of the previous year, backed on loosened lockdown measures by the government as compared to the same period last year.
In its hotel business, occupancy was split 66% and 34% between foreign and local guests respectively.