PVC feedstock global shortages to weigh on Proplastics’ product supply

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Extruder of polyethylene for process production of plastic bags
  • Feedstock supplies affected by COVID-19
  • Reduction in production and sales volumes expected

Harare – Global players in the PVC industry have adjusted pricing to address the supply gaps, a development which is also set to affect local players involved in the production of piping products.

Four major PVC manufacturers in the US namely Formosa Plastics USA, Westlake Chemical, Shintech, and OxyChem increased PVC products’ prices by 3 cents/lb while prices in India have been on the rise since November 2019.

Zimbabwe Stock Exchange (ZSE) listed plastic pipes and fittings manufacturer and marketer, Proplastics limited which is the leading local supplier by volumes has said it could experience a decline in sales and production volumes for the remainder of the year and the first quarter of 2021 prompted by the global shortage of polyvinyl chloride (PVC) feedstock.

The warning is on the backdrop of a closure of manufacturing facilities for the greater part of the first half of the current year across the globe, due to COVID-19. CZI, a local industry board earlier reported that 85% of the local manufacturing sector totally shut production in the month of April, while a gradual reopening has seen recovery in production of select goods.

Proplastics manufactures pipes and fittings for various applications in irrigation, water and sewer reticulation, mining, telecommunications and building construction. Proplastics recently commissioned a plant with capacity to produce 32,000 tonnes per annum, after committing circa US$5 million to construct the plant.

With a reduced supply of raw materials, a decline in production is expected and consequently an imbalance in supply and demand that the company expects until the end of Q1 2021 leading to the surge in the prices for finished goods which could lower sales volumes as was the case for the financial year ended 31 December 2019.

Proplastic’s sales volumes for the third quarter period to September 2020 however went up 10% above the comparative period in 2019 reversig a downward trend realised in the first half period of the year.

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