TINASHE MAKICHI
Zimbabwe’s largest packaging manufacturer, Nampak Zimbabwe Limited, has narrowed its loss to ZWL$658.6m in the year to September 30, 2020 from ZWL$6.3bn reported in the prior comparative period on increased local demand despite a plunge in volumes.
Revenue for the group increased by a marginal 1% to ZWL$5.08bn from ZWL$5.06bn in the prior year.
Hunyani Corrugated division registered a 28% decline compared to the prior year, weighed down by the tobacco case market where the crop output was significantly down on the prior year and the delayed start of this year’s tobacco marketing season due to Covid-19 concerns.
Carnaud Metalbox volumes for the period under review declined 34% compared to the prior year.
There was also a decline in regional exports but the cartons, Labels and Sacks division remained profitable despite stiff competition and reduced volumes.
Mega Pak full year volumes declined 12% against the prior year, mainly due to constrained consumer demand in the preforms market in the first half of the year.
However, local demand increased in the final quarter of the year and regional export demand was also depressed, especially in the Democratic Republic of Congo.
“Nampak has not been immune to the social and economic impact of the Covid-19 pandemic and the resulting effects on the Zimbabwe economy over the past year,” the group managing director, John Van Gend said.
The shortage of foreign exchange and reduced disposable incomes in the first half of the year negatively impacted demand.
Van Gend said there was however improved product demand in the final quarter, and access to needed foreign exchange improved through the auction system.
Softex Tissue products for the period continued to trade profitably because of tight cost control and an improved product mix.
Total assets for the group closed the year at ZWL$3.5bn from ZWL$6.5bn in prior year.
Nampak says its engaging government over a possibility of getting back control of its estates in terms of the Bilateral Investment Protection and Promotion Agreement with South Africa.
“Our intention is to rehabilitate them for timber and agricultural purposes, in support of the current Government policy thrust in this direction,” Van Gend said.
The group did not declare a dividend during the year as the available cash resources are expected to fund future capital expenditure projects and meet working capital requirements.
In the outlook, Van Gend said the group will continue to focus on cost containment amid subdued demand on packaging materials.
