- The company invested US$71 million in mechanisation
- In Q12023, all units except SA recorded volumes growth
- About the investments
Harare- Delta Corporation Limited, the leading beverage company listed on the Zimbabwe Stock Exchange, has announced a $71 million investment aimed at boosting its production efficiency and profitability. Given that the company's capacity utilisation is consistently above 80% and nearly 100% in some business segments, the new investments were channeled towards building new plants to meet the growing demand.
During the first quarter ended 30 June 2023, the company reported growth accros all categories except in South Africa due to weaker Rand and blackouts.
Q123 volumes performance in percentage
As a result of good volumes performance, the company’s revenue scaled up, both in Zimbabwe dollar and US dollar terms.
Commentary on Investments
Since 2017, Delta has invested more than US$169 million in modernizing its manufacturing and bottling plants, distribution fleet, cold drink equipment, and ancillary systems. The company plans to invest around 30-35% of EBITDA each year (+US$50M) for the next five years in plant and equipment and ancillary services.
The new packaging line for lagers will run four types of bottles, with a daily production of about 350,000 litres per day. The investment will raise the national beer packaging capacity from 2,200,000 hectolitres (220m litres) to 2,900,000 hectolitres (290m litres) per annum, with a capacity utilization of 80%.
The sparkling beverages new packaging line has the capacity to produce 700,000 hectolitres/ 70,000,000 litres per annum with a capability to run three types of bottles.
The Chibuku Super also took the largest piece of investments at US$20 million, which will have volumes output of 20,000 bottles per hour, equivalent to 250 hectolitres per hour, taking annual output to 1.3 million hectolitres with a capacity utilization of 80%.
The investment impact on the beverages industry will be improved product availability across the country at affordable prices, higher level of employment, improved downstream trader business, improved grain requirements (maize & sorghum).
Therefore, the US$71 million investment by Delta Corporation will increase production capacity and enable the company to better meet customer demand by installing new packaging lines for lagers and sparkling beverages, as well as upgrading the production line for Chibuku Super. Diversifying product offerings will mitigate risks and create new revenue streams, while leveraging new technologies and optimizing the supply chain will reduce costs and increase efficiency, leading to higher output, productivity, and profitability.
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