Nampak a leading packaging material producer, has reported that it is failing to meet market demand at its Mega Pak unit following a demand shock. The company said in the last quarter of 2017, there has particulary been strong demand for PET performs and closures for the Delta Super Chibuku and Schweppes products.

For simplicity the plastic bottled sparkling beverages from Delta in 300 ml and 500 ml as well as Super Chibuku procure their packaging material from Nampak. Likewise the plastic containers used by Schweepes in packaging a significant range of their products technically known as PETs are sourced from Mega Pak a unit of Nampak.

The surge in demand for consumer facing fast moving consumer goods late in 2017 went on to stimulate demand for packaging material at Nampak resulting in supply disruptions.

At an annual general meeting in Harare today Nampak said due to the high demand all spare capacity at its factories has now been filled up. To address the problem Nampak has set aside a budget to expand its capacity so as to match and satisfy the reemerging demand.

Besides capacity constraints Nampak said it faced severe challenges in procuring raw materials for use in cans production.

In his presentation the CEO said “CMB (a unit of Nampak responsible for producing can products) have been hardest hit by the lack of forex, and have from time to time run very low on raw materials, which in turn has stopped us from able to fully supply the market.

Earlier in January in a trading update Delta reported that sparkling beverages volumes improved by 14% over the 3 months period to December.

As for the sorghum beer segment under which Chibuku Super falls, volumes went up by 10% for the quarter.

The firming demand at Delta and its associates shows reemerging aggregate demand in the economy and is a positive indicator for growth.