• Export sales rose 139% in the first five months of 2026, increasing their share of total turnover from 4% to 6%, achieved
• USD receipts now make up 97% of group revenue, confirming that Proplastics has largely completed the dollarisation of its revenue base
• Management is signalling strong forward demand confidence by growing production 28% (ahead of 26% sales growth), rebuilding strategic inventory, and investing in additional manufacturing equipment

Harare- Proplastics Limited, Zimbabwe's only listed manufacturer of PVC piping and infrastructure systems, has seen a 139% surge in export sales in the first five months of 2026, rising from a 4% contribution to total turnover in the prior period to 6%, as the company's regional market development programme outpaced the constraints of a 30% foreign currency surrender requirement that the company identified in the FY2025 annual results as the primary structural inhibitor of export competitiveness.

Simultaneously, USD receipts now account for 97% of total group revenue with ZiG contributing the remaining 3%, a composition that confirms Proplastics has effectively completed the dollarisation of its revenue base and is operating more like a regional exporter than a domestically focused manufacturer.

The group has a stated target of 10% export contribution to turnover. Based on first-half trajectory, that target is no longer distant ambition, it is the visible destination of a curve already in motion.

The 139% export growth in the first five months of 2026 is significant not as a standalone percentage but as a performance achieved against a documented policy headwind. The 30% foreign currency surrender requirement mandates that Proplastics surrender 30 cents of every USD earned from export sales at the official interbank rate. In the FY2025 full-year results, export sales were 2.7% of total turnover.

The company explicitly identified the surrender requirement as making export growth structurally uncompetitive against South African and regional manufacturers who face no equivalent policy-imposed cost.

Proplastics' piping systems are winning regional orders at pricing that absorbs both the surrender cost and the freight differential against South African competitors. That is the output of a business growing its regional market share despite an avoidable policy burden rather than because of enabling conditions.

The opportunity cost of the surrender requirement, the export growth the company would be generating absent that constraint is the investment hypothesis most worth constructing as the second half unfolds and management continues targeting 10% export contribution.

The 97% USD revenue composition represents the most important structural change in Proplastics' operating model over the past 24 months and the context without which the export growth story cannot be fully understood. The company has effectively decoupled its cash generation from ZiG depreciation risk, ZiG monetary policy decisions, and the effective discount that ZiG government payments impose when converted at parallel market rates for USD raw material procurement.

The FY2025 results documented that discount at approximately 23 cents per dollar on government ZiG payments, a loss that does not appear in reported revenue but manifests in the working capital cycle. A 97% USD collection rate makes that mechanism largely irrelevant to Proplastics' current operating model.

Meanwhile, sales volumes rose 26% year-on-year over the five-month period while production grew 28% and revenue increased 23%. The production outpacing sales is the balance sheet signal that the trading update's narrative confirms is deliberate rather than coincidental, management is rebuilding inventories of strategic products while preparing capacity for sustained demand.

A manufacturer managing tight dual-currency liquidity does not build strategic inventory unless the forward demand visibility is strong enough to justify tying up working capital in stock rather than converting it to cash. The inventory is management's confidence expressed in capital allocation rather than words.

The additional manufacturing equipment investment and backup generation programme referenced in the briefing compounds that signal. Capital going simultaneously into inventory and equipment in a constrained liquidity environment means management is looking at the second half and at 2027 with sufficient demand confidence to deploy available resources before the demand materialises rather than in response to it.

Therefore, Proplastics enters the second half of 2026 having confirmed three conditions whose simultaneous presence the FY2025 results did not guarantee. Demand is strong enough to sustain 26% volume growth and attract 139% export revenue expansion across a policy environment that structurally suppresses export margins, capacity is being extended actively rather than managed defensively, and management is allocating capital, across both working capital and equipment investment, in ways that express conviction about sustained demand rather than caution about liquidity constraints.

The working capital execution risk is real, tight USD liquidity can compress cash conversion even when sales are growing  and the Middle East raw material pricing remains a margin management challenge.

However, the first five months of 2026 describe a company whose trajectory is running materially ahead of where the FY2025 policy risk disclosures suggested it would be, with export momentum as the most commercially important evidence that the underlying business is stronger than the domestic policy environment might have made it appear.

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