Kiyapili Sibanda, Business Reporter
ZIMBABWE Stock Exchange-listed firm Proplastics Limited has cut its prices by 11 percent as a strategy to push volumes.

The company’s revenue for the year ended December 31, 2016 remained flat at $14.1 million but management says plans are underway to improve domestic sales and export earnings.

Chief executive officer, Mr Kuda Chigiya, said the price cut would enable the company to remain competitive locally and regionally.

“The price cut is to enable the group to remain competitive locally and regionally, whilst the counter strategy is to grow volumes, which we achieved at 13 percent on prior year. The price reduction and the increased volumes had a compensating effect on the revenues. Currently we remain competitively priced both locally and regionally,” he said.

Mr Chigiya, however, said the firm was affected by foreign currency shortages and tight liquidity situation, which have a negative bearing on their cash flows.

“Foreign currency shortages affect importation of raw materials, which in turn results in lost production days and ultimately lost revenues. Tight liquidity situation affects our customers’ ability to pay and in turn affects our operating cash flows and most projects have been put on hold and this affects demand for our products,” he said.

Mr Chigiya told Business Chronicle that the introduction of bond notes and the use of plastic money have improved transactions for smaller clients. He, however, said the main mode of transacting still remains the RTGS system for most traders and contractors.

Mr Chigiya added that improved factory volumes resulted in lower unit cost of production but the main challenge has been the failure to pay suppliers on time due to foreign currency shortages.

He said inspection requirements have also caused delays in the procurement process of subcomponents of the production process and the 10 percent duty payment on raw materials that are imported.

“Plant modernisation will improve both production and efficiencies, restructured the balance sheet by selling non-productive assets. We are also going to focus on new products and new markets from exports,” said Mr Chigiya.

Proplastics specialises in the production of Polyvinyl Chloride (PVC), High-Density Polyethylene (HDPE), Low-Density Polyethylene (LDPE) pipes and related fittings. The pipes are manufactured for various applications in irrigation, water and sewer reticulation, mining, telecommunications and building construction.

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