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Delta’s additional capacity for Chibuku Super ready in October



Delta Corporation says it will commission two new Chibuku Super plants in Masvingo and Kwekwe in October this year at a cost of $30mln with all the equipment now on site.

Giving a trading update for the first four months at the company’s AGM, Chief executive officer Pearson Gowero said sorghum beer volumes increased largely on Chibuku Super as it experienced increased demand prompting the Company to work on increasing production.

“Sorghum beer improved on Chibuku Super and we have increased market share in that business thus we are looking at distribution as well as putting additional capacity in Kwekwe and Masvingo which will be commissioned in October,” he said.

Gowero said weak economic fundamentals, cash shortages, underperformance of agriculture and significant policy shifts continue to underperform the company therefore the Company predicted flat growth in the interim.

“We expect little change in the trading environment and we will focus on strengthening cost containment measures and cost base while continuing to defend market share.

During the period, larger beer volume went down 14% with revenue also down 17% and Gowero said the drop in revenue reflects the mix which is shifting towards cheaper products.

Sorghum beer volume increased 9% while revenue went up only 3% after the group took a decision to discount the scud to steer up volume.

“Soft drinks volume was down 17%, but revenue is better because we sell high value products,” he said.
Gowero said in the larger beer segment, generally demand is depressed towards value for money with the eagle trending a lot.

In sorghum beer, Gowero said the group introduced discounts to stimulate demand. The performance of soft drinks was reportedly poor due to increased competition from neighbouring countries.

In terms of revenue contribution mix, sorghum beer has increased its contribution while larger and soft drinks have dropped in the period.

On associates, Afdis is still to report its financials, while at Schweppes volumes went up 8% with revenue also going down 5% due to higher contribution of water versus juice drinks but market share remains stable.

Nampack Zimbabwe revenue is trending below prior year but profitability is improving due to streamlining costs and productivity. The company also witnessed growth in plastic packaging volumes.

At the agm audit and directors fees were approved at $410 600 and $167 000 respectively


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