Proplastics adopts survival strategies

TINASHE MAKICHI

 

Zimbabwe’s leading plastic pipe manufacturer, Proplastics Limited, has engaged commission-based salespersons in importing markets as part of new survival strategies to ensure sustainability in the face of an uncertain operating environment adversely impacted by Covid-19 pandemic, Business Times can report.

The Zimbabwe Stock exchange listed company is also expanding its raw materials suppliers database to deal with disruptions in the supply chain and ensure uninterrupted production cycles.

Covid-19 has been so brutal to companies and most of them are now struggling to keep their  financial wheels turning due to dwindling revenues.

Consequently, many companies now have scarcer  cash reserves and smaller margins to manage sudden shocks.

Proplastics chief executive officer, Kuda Chigiya, told Business Times that the company has relooked at how it operates because the traditional way of conducting business has drastically shifted.

He said Covid-19 has not spared Proplastics.

However,  Chigiya is anticipating a better performance this year because of the new strategies the company has embarked on.

“…The business came up with (new) strategies (including) employing the use of commission-based salespersons in the importing markets as well as expanding the supplier database for raw materials to ensure uninterrupted production cycles,” Chigiya told Business Times.

He added: “The business also maintained a competitive pricing regime and continued to use commercial transporters for deliveries. As a result of the initiatives above, performance for the year is way above last year on both the local and exports revenues and tonnages.”

In its trading update for the quarter to March 31, 2021,  Proplastics reported solid results.

Sales volumes grew 93% compared to prior comparative periods.

Exports grew 71% contributing 7% to total revenue compared to 2% reported in the prior comparative period.

As a result of strong volume performance, revenue was 29% above budget and 187%  ahead of prior year.

The gross profit margins during the period were maintained at the same level as prior year despite the challenges in the availability and pricing of raw materials in the quarter.

With the new factory in full operation, Proplastics increased production capacity and enhanced efficiencies.

As a result, the company reported a strong earnings performance for the quarter.

The current ratio improved to 1.44 from 0.71 in the similar period last year.

Gearing remained low at 4% while foreign creditors closed the quarter at US$585 000 compared to US$1.5m at the end of the year 2020.

 

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