- Proplastics reported an 11% rise in production
- Quarterly sales volumes also increased by 11% compared to the previous period
- Liquidity issues, low economic activity, foreign currency retention and power disruptions affected revenue growth
Harare-Proplastics Limited, a Zimbabwe Stock Exchange listed plastics manufacturer and distributor, has reported a 11% jump in production for the first quarter of 2025, according to its latest trading update.
The uptick comes as the company successfully tackled supply chain bottlenecks, clearing backlogs and restocking high-demand products to meet market needs.
“Production volumes rose by 11% compared to the previous period, driven by the resolution of supply backlogs and efforts to replenish stocks for our most sought-after products,” said Greg Sebborn company chairperson.
The supply backlogs, which had previously hampered the company’s ability to meet demand, stemmed from disruptions in raw material availability and logistical challenges, common in Zimbabwe’s manufacturing sector due to foreign currency shortages and import constraints.
This production increase directly fuelled an 11% rise in quarterly sales volumes compared to the prior period, reflecting strong domestic demand for Proplastics’ products, such as PVC pipes, fittings, and water storage solutions.
As a result, revenue a saw a modest 3% growth, climbing to US$4.2 million from USD4.1 million in the previous period.
The smaller revenue gain, despite the higher sales volume was due to liquidity issues, low economic activity and increasing power disruptions.
The company also faced challenges in its export business, recording no export contribution during the quarter.
This was largely due to a policy change that increased the foreign currency surrender requirement from 25% to 30% effective 6 February 2025.
Under this regulation, exporters must surrender a portion of their foreign earnings to the Reserve Bank of Zimbabwe, which converts it to local currency at an official rate often less favourable than the parallel market rate.
The additional 5% surrender requirement eroded Proplastics’ export competitiveness, making it harder to price products attractively in international markets.
For a company like Proplastics, which relies on both domestic and regional markets, the lack of export revenue is a significant setback.
Looking ahead, the company remains optimistic about a rebound in export revenue in the second quarter.
‘’Export revenue is expected in the second quarter, with a growing volume of export enquiries being received.’’
Equity Axis News
