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Distell, Nampak prop up Zimbabwean units - Zimbabwe
Distell, Nampak prop up Zimbabwean units - Zimbabwe

Distell, Nampak prop up Zimbabwean units - Zimbabwe


IOL Business - Feb 17th 2015, 13:19

Nampak and Distell are shoring up their units in Zimbabwe, buoyed by growing demand from a local market that has been hit by a productivity slump and operational constraints.  

The Zimbabwean units of South African-based firms are able to leverage on their parent companies for much-needed capital and capacity. Distell jointly owns Zimbabwe spirit and cider producer, African Distillers (Afdis), together with Delta Corporation, the locally listed unit of brewing giant, SABMiller.

While Delta has recorded marked declines in its volumes and revenues for the lager beer category, Afdis has recorded improved financials for the half-year period to December, with profits surging by as much as 46 percent.

Profits for the interim period to December spiked to $1.9 million (R22.1m), propelled by a 20 percent surge in volumes, translating to a dividend of 0.21 cents per share for the period. The company said increased cider production capacity had resulted in a 13 percent surge in gross sales, which amounted to $20.8m.

“Operating income at $2.6m grew by 29 percent on the previous year. This is attributed to value-chain cost reduction initiatives and favourable rand exchange rate movement over the period,” Joel Mutizwa, the chair of Afdis, said.

Most Zimbabwean companies are struggling to grow profits, while several others have had to scale down operations or close shop. Afdis’s local production of ciders had provided it with sufficient scale to widen its revenue base as most of the ciders consumed in Zimbabwe were being imported mostly from South Africa, officials told Business Report.

Robust presence

JSE-listed Nampak has bought into three Zimbabwean businesses: MegaPak, Hunyani Holdings, and Carnaud Metalbox Zimbabwe, a metal can supplier. MegaPak is jointly owned with Delta Corporation while Hunyani, a paper and corrugated packaging company, is eyeing a robust presence in the Zimbabwean packaging market.

Nampak Zimbabwe is investing as much as $8m into its Zimbabwe operations, although cheaper imports are hurting its positioning in the market for the packaging and corrugated-steel segments. Informal and formal importers of the material, which the company produces in Zimbabwe, offer these at lower prices aimed at quick disposal of stock. From © Independent On-line 2013. All rights reserved. 

Read more about: zimbabwe | nampak | megapak | distell

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