ART Holdings Faces Economic Challenges, Reports Decline in Revenue and Volumes

Amalgamated Regional Trading (ART) Holdings, the parent company of Eversharp, a leading manufacturer of stationery products in Southern Africa, has faced significant operational challenges due to economic instability in the region. In presenting the company’s financial statements for the year ending 30 September 2024, ART Holdings chairman Thomas Ushe outlined a series of difficulties that impacted the company’s performance, including foreign currency shortages, power supply issues, and the broader economic fluctuations in the region.

The company, which operates in Zimbabwe, Malawi, and the wider Southern African market, struggled with these challenges throughout the year. According to Ushe, these external factors hindered the business’s transformation and affected its financial results, leading to a decrease in revenue by 11% compared to the previous year. The company’s export volumes also declined by 15%, further exacerbating the financial strain.

One of the key issues faced by Eversharp, ART’s stationery division, was the power shortages, which led to product shortages and disruptions in the formal market. The company scaled back its investment in the Paper segment, which contributed to significant losses in that division, compounded by restructuring costs and under-recoveries. Despite these setbacks, ART’s other business segments, such as its energy storage, timber, and stationery businesses, showed resilience.

The foreign currency crisis in the region also played a major role in ART’s challenges, with payment delays reported in key markets like Zambia and Malawi. The increased prevalence of low-cost imported pens during peak back-to-school periods further affected ART’s sales, leading to a 10% decline in volumes. However, the company did experience some success with the launch of its new Eversharp pens, which accounted for 10% of total revenue in their first year on the market.

Despite the difficulties, ART Holdings remains committed to its customers and stakeholders. The company has continued to invest in new technologies, including the launch of maintenance-free batteries, and expanded its battery clinics throughout the region.

Looking ahead, ART Holdings anticipates that the economic environment will remain volatile, but the company is focused on navigating these challenges as it seeks to stabilize its operations and maintain growth. In the face of adversity, ART’s strategic moves, including the appointment of Farai Sithole as Executive Director in June 2024, reflect the company’s ongoing commitment to adaptation and resilience in the face of economic challenges.

For now, ART Holdings continues to face an unpredictable market environment, but its strong foundations in key sectors position it to recover and continue its regional operations, particularly as the economic issues plaguing the region are addressed.