“We used to pay Tsh 400 million ($259,740.3) as power bill per month, but now the charges will shot-up to Tsh 700 million ($454,545.5), I don’t know how to raise additional cash” Mr Shah said.

A to Z management is currently working hard, scouting for the best option to cut down overhead cost in a bid to position their business. 

Though, Mr Shah ruled out the staffs layoff as not an option at least for now, but analysts say in a long run, the workers redundancy would be inevitable to cut down operational costs rather than running in a loss.

To remain in the business, A to Z has to either cut down production or increase bed net prices to cover the cost, which at the end will affect profits margin.

Daniel Mghwira, business and marketing analyst with Miradi Associates in Tanzania says the power cost is one of the highest in the region and would make Tanzanian products to loose competitiveness particularly, in tough economic times.

“The higher energy cost has a negative impact on the products competitiveness in export markets, and the most likely strategy is to pass this along to end-user consumers” Mr Mghwira explains.

Mr. Shah is also worried that A to Z’s bed nets might not compete fairly with less expensive LLINs manufactured in Asia where electricity charges are lowered down in order to make their products more competitive.

A to Z imports the impregnated resin, extruding the polyethylene fiber, knitting and sewing it into nets and finally packaging and storing LLINs.

As a result of these higher upfront costs and higher labour, electricity, raw material, shipping costs, A to Z’s bednets would inevitably become more expensive than nets manufactured in Asia.

Expansion

Analysts fear that with the current challenges, the A to Z ambitious expansion plan is likely to delay as the focus of the management would be how to reduce operational costs.

A to Z Textile Mills Ltd is a family owned and operated company which started with a single sewing machine in the 1960s, expanding considerably to presently include 11 companies within the group which offer a wide variety of products and services in both local and international markets.

Most popularly known for the production of polyester and LLINS in an effort to combat malaria, A to Z and its group of companies manufacture high quality products in two separate locations, including an Export Processing Zone (EPZ) spanning over 200,000 square meters of built up area.

With over 48 years of operational experience, establishing one of the largest vertically integrated manufacturing plants in East Africa, A to Z Textile Mills Ltd and the companies within its group take pride and care in serving its customers, clients, investors and partners worldwide.