LETTICIA MAGOMBO
Zimbabwe’s largest packaging manufacturer, Nampak Zimbabwe Limited reported a 83% rise in its revenue in the quarter to December 31, 2021 driven by improved sales volumes and inflationary pricing, MD John van Gend has said.
He said that there were significant increases in Hunyani Paper and Packaging Corrugated Division which reported a 43% increase compared to the previous year due to carry-over of late season tobacco box orders from the previous financial year.
The company registered a 27% increase in profit compared to the prior comparative period.
The company also had volume increases in the CarnaudMetalbox division.
“CarnaudMetalbox volumes grew by 2% compared to the prior year quarter period. The business relied largely on local agents for the supply of plastic raw material. Higher HDPE bottle volumes being 10% up on the previous year period were aided by a 4% growth in injected closure volumes. Metals volumes were down 13% mainly due to tin plate shortages,” van Gend said.
However, the Hunyani Corrugated Division saw a 3% volume decline due to paper supply challenges.
The Cartons Labels and Snacks Division was also 23% below the previous year due to lower flour bag sales and tobacco paper sales.
“The first quarter volumes were 2% below the prior year period. Demand in the large injection market exceeded our available capacity. The increased demand in the preforms market remained strong and there was an upturn in tank demand,” van Gend said.
“All sectors of the business suffered from raw material shortages. The unreliable electricity supply at Ruwa affected both the available plant capacity and operational efficiencies.”
He said the trading environment caused challenges for the Nampak despite sustained strong demand across all sectors of their business.
The Nampak MD said the company experienced forex challenges, shortage of raw materials, worldwide logistics bottlenecks which curtailed the company’s ability to supply customers.
He expects headwinds to remain.
“Difficulties remain ahead with the disparity between the official and market-based exchange rates, giving rise now to spiralling inflation which in turn increases costs and wage pressures,” the executive said.
“The shortage of raw materials and continuing difficulties in accessing sufficient foreign exchange are ongoing challenges which will not go away in the foreseeable future. Businesses are resilient, but the continued economic headwinds continue to hamper operations.”
He said there were several projects planned including the new Injection Moulding Machine for Mega Pak, new generators for Hunyani and Mega Pak and the rehabilitation of Maganga Estates for timber and agricultural purposes.
