Delta to upgrade its plant, machinery

via Delta to upgrade its plant, machinery June 2, 2014 by Tarisai Mandizha in NewsDay

ZIMBABWE’S largest beverages producer Delta Corporation Limited, has announced plans to upgrade its plant and machinery at a cost of $54 million in a programme expected to run until next March.

Company secretary Alex Makamure told journalists during a tour of the beverage maker’s Harare factory last week that several projects were currently at various stages of completion.

“Delta plans to spend about $54 million during the year to March 2015. This will cover projects on new plant in all our beverages categories, containers, coolers and distribution fleet. These projects are at various levels of execution,” Makamure said.

He, however, said the business trends were soft in line with the weak aggregate demand.

“You will be aware that we are currently running the Coca-Cola Samba Soccer World Cup promotion that is indicating positive results,” he said.

In the financial year for the company’s full year results, the group, however, expressed concern over decline in consumer’s buying power over the last quarter.

Revenue declined by 1% to $625,5 million and this was against volume losses in the higher margin lager beer and soft drinks mitigated by improved value capture in sorghum beer and alternative beverages.

Sparkling beverages during the period under review were also down 2% to $225 million, a scenario attributed to an out-of-stock situation occasioned by extended water supply disruption at the main factory in Harare and softening demand.

However, Chibuku sales went up by 24% to $146 million as more consumers turned to cheaper and affordable sorghum beer.

Chibuku Super contributed 10% of the sorghum line volume growth.

The group said the commissioning of the second Chibuku Super line was on schedule to be in full production in the first quarter of the new financial year.

Earnings Before Interest Taxation (EBIT) were down by 1% to $134,2 million while Earnings Before Interest Taxation Depreciation and Armortisation (EBITDA) went up by 2% to $165,2 million.