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Delta’s Chibuku plant at Fairbridge in Bulawayo

Business Reporter
Delta Beverages’ new $17 million Chibuku plant at Fairbridge in Bulawayo is now operational following its commissioning last month.

Giving a trading update at the company’s annual general meeting last Friday, Delta chief executive Pearson Gowero said following the commissioning of the Chibuku plant the company is now focused on growing sorghum beer business.

“The demand for sorghum beer has been growing on the local market and following the commissioning of the Fairbridge plant and Chitungwiza we’ll now focus on driving growth of sorghum beer which had previously been restricted by capacity.

“We’ve witnessed great demand on Chibuku Super and the company will enhance efficiency in distribution,” said Gowero.

Demand at the Chitungwiza plant is currently at 9,000 hectolitres per day against current production of 6,000 hectolitres per day.

With the new Fairbridge plant coming on line, Delta is projecting national capacity for Chibuku Super to increase to 3.5 million hectolitres per year closing the supply gap that is currently being experienced in the market.

“We started commissioning on July 26, the plant is now in production, the engineers are now putting final touches, and once at full capacity we expect to be able to meet demand,” he said.

Gowero said the company’s volumes and revenues declined in the first quarter.

He said the month of July performed better compared to the first three months, as most of the categories showed resilience and positive growth.

Gowero said key focus areas for the company would be to grow the top line and business growth across all product categories.

“Going forward we’re looking at improving our product mix to meet the demands of our customers while reducing costs across the value chain.

“The company will also focus on optimising and sustaining dividend payout,” said Gowero.

Lager beer volumes for the period to June were eight percent below the previous period while sparkling beverages were down 15 percent as consumers went for lower priced alternatives.

Maheu and dairy mix beverages recorded a decline of 11 percent for the quarter due, partly, to production related outages.

Sorghum beer was down 12 percent but revenue increased two percent.

On subsidiaries Gowero said Schweppes’ volumes were down 11 percent while Nampak Zimbabwe’s packaging volumes for the period were depressed in line with the performance of key customers.

He said Delta, Mutare Bottling and Schweppes remain the biggest customers for Nampak Zimbabwe.

“The NamPak transaction resulted in value erosion, but will in the long run unlock value for the group. Afdis performance continues to be affected by economic pressures like any other business,” said Gowero.