Harare – Packaging manufacturer Nampak Zimbabwe has reported a 13% increase in sales revenue during the last 3 month of the prior year, which falls within its first quarter period on its financial year calender.
The growth in topline was attributed to an out-performance in volumes in line with strong demand across all of the company’s products within the group’s units.
The Group Managing Director, John Van Gend, said all units are currently operating profitably and that “management continues to focus on prudent cost control, which is becoming more challenging as inflationary pressures mount.”
In the last 3 of the year, inflationary pressure began to rage coming from 5% in September to settle at 42% as at December. The pressure is likely to be sustained into 2019 amid currency challenges.
Company responded to the growth in demand in the last quarter of the year through increasing price to contain demand, in turn helping boost their revenues.
For Nampak challenges however persisted due to the lack of adequate forex to necessitate importation of raw materials. The company demands $3.5 million worth of forex every month to fully meet demand.
Although the company has made forays into the regional markets through exports, the net realisable profits have been meager and inadequate to finance import demands. The company said it looks at growing its forex markets by 30%.
“All units are currently trading profitably, whilst treasury and cash flow management remains a key focus area. We are currently evaluating various financing options that may allow us to continue capital investment, to address areas of capacity constraints and improve the product offering to our customers,” the group CE said
The three units operating under Nampak Zimbabwe are Hunyani Holdings, Mega Pak and Carnaud Metal Box (CMB) which were merged into one business entity five years ago by the parent company Nampak Holdings Ltd.
The plastic sector running under CMB was reported to have increased capacity in both injection and blow moulding sections to meet the growing demand in the dairy and dairy related products.
CMB is the sole supplier of metal cans, crowns and aerosols in Zimbabwe and a leading manufacturer of plastic bottles. Zimbabwe Delta, a leader in the beverages market, is one of its largest customer.
“Nampak said it continues to look for areas where it can rationalise and improve the business, while remaining focussed on continued cost control, growing our exports and preservation of shareholder value,” he said.
Hunyani and Mega Pak also started the new financial year well, with volumes ahead of last year. However, a lack of raw materials is shielding the group from being able to satisfy the market demand at present.
Going forward, the group is focusing on expanding exports markets into the region, recording a significant expansion into the Malawi and DRC over the past 12 months.
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