- US dollar revenue soared to 70% against 30% in local currency
- Exports soared by 77% ahead of last year
- However, anaemic power supplies dampened production by 17%
Harare- Plastics products manufacturer and distributor, Proplastics Limited has recorded a surge in US dollar-denominated revenue of 70%, compared to 30% in Zimbabwe dollar terms as the economy continues to self-dollarise. This was despite a 17.5% decrease in production due to electricity outages.
Rocketing of US dollar-denominated revenue was propelled by increased local sales in US dollars and a surge of export sales by 77% against last year.
In a trading update for the five months ended 31 May 2023, the Group said the overall contribution to total sales (of exports) was at 15% against 9% for the same period last year.
Overall, sales volumes for the five months grew by 14% with the turnover growing by 4%.
Growth in revenue and sales came despite incurring headwinds on the local front. The Group suffered immensely from power outages due to national grid failure and shortage of foreign currency as the auction system continues to be underfed.
The Group participated in the foreign currency auction with allocations amounting to US$1.1 million with only $US820k disbursed.
However, according to the Group, the allocations were far from meeting the business’s requirements.
Due to disrupted power supplies, production volumes dropped by 17.5% below the prior year despite recording increased revenue.
“We lost an average of 28 days of production due to power cuts and faults,” said the Group in a trading update.
The Group said new factory plant availability stood at 92% with utilisation at 56%.
The Group replaced its ERP software from SAGE 1000 to SAP Business 1, and the migration process is now fully complete.
‘The business has slowed down on CAPEX and the focus is on managing working capital and deriving maximum value out of the existing investments.”
“Despite the drawback of the power challenges, the factory remains capacitated to convert all orders in time as a result of modern investments into the new factory,” concluded the Group.
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