Harare – Diversified industrial conglomerate Innscor Africa Limited says its light manufacturing and services segments performed exceptionally well for the year ended June 30, 2018.
This reporting segment comprises the results of the Group’s non-controlling interests in Probrands and Probottlers as well as those of Prodairy, Natpak and Capri.
Innscor said at Probrands volumes were 57 percent above those recorded in the comparative year, driven by good growth in the downpacking operation.
At Probottlers, the company said volumes grew by 23 percent over the comparative year with strong growth coming in the cordials category driving revenue growth of 32 percent over the same period.
“Reduced margins combined with pre-operating costs for the upgraded carbonated soft drink (CSD) line, however, resulted in moderate operating profit growth of 8 percent.
“The CSD plant upgrade was completed in the third quarter of the current financial year and the increased capacity should enable the business to achieve critical mass and optimal efficiency going forward.”
Innscor said Prodairy which was established in January 2018, as a greenfield investment and houses a UHT milk production line, as well as steri and cultured milk lines introduced Dairy blend to its product line and initial volumes have been excellent.
“Additional capacity for the production of maheu will come on line during the first quarter of the new financial year; whilst other dairy product lines are also being investigated.
“The key to the future success of this operation will be access to adequate raw milk supply, and in this regard, in addition to working with contract farmers, the business has started a process of backward integration into raw milk production.
“An initial investment into a dairy herd of 400 head has been made via a smart partnership with Government utilising the Grasslands Research station in Marondera, and the business will continue to look at opportunities with local farmers to increase raw milk supply.”
The Company said the attainment of sufficient critical mass by the beginning of the second quarter of the new financial year should enable the operation to reach profitability.
In the period under review, at Natpak, volume growth of 45 percent over the comparative year was driven largely by increased utilisation of the new flexible packaging lines, whilst sack production also showed steady growth, and as a result overall revenues for the business increased by 67 percent over the same period.
“The additional capability installed in the operation on the existing operating cost platform allowed for a significant increase in operating profitability to be achieved.
“Migration of the sacks division into a new site, secured during the year under review, is nearing completion.
“This project includes the commissioning of a new tapeline and additional weaving capacity, and should be completed towards the end of September 2018.”
It said during the latter part of the financial year under review, the business also invested in equipment to expand its operations into the manufacture of rigid packaging and this equipment is due to be commissioned in the second quarter of the 2019 financial year.
Additionally, an investment into Alpha Packaging, a new business manufacturing corrugated packaging was also made during the course of the year, with commissioning of this equipment also expected to take place in the second quarter of the new financial year.
Both these new capabilities are expected to maintain the steep growth trajectory in this business into the coming year.
In the period under review, volumes at Capri were similar to those recorded in the comparative year.
“Limited currency support for key raw materials however restricted the operation from increasing its export sales. Product quality and innovation continues to improve and the well managed overheads allowed for some operating leverage to be achieved notwithstanding the restrictions on volumes.”
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