Nqobile Tshili, Business Correspondent
LEADING beverages maker, Delta Corporation, has consolidated its stake in African Distillers Limited (Afdis) after acquiring 50,1 percent share ownership, management has said.
Delta Southern Region general manager responsible for sparkling beverages, Mr Moses Gambiza, revealed the development at the company’s cocktail party held at its stand at the Zimbabwe International Trade Fair (ZITF) in Bulawayo on Friday.
“Turning to investments Delta has been making, the group effective shareholding in Afdis has increased to 50,1 percent and the entity has been consolidated as a subsidiary,” he said.
“The volumes and revenue indicate growth in that business, notwithstanding the distortions in the macroeconomic environment.”
The core business of African Distillers Limited is the manufacture, distribution and marketing of branded wines, spirits and ciders for the Zimbabwean market and export.
“I’m also happy to report that the company announced in December that it had entered a binding agreement to acquire a 100 percent stake held by Diageo PLS in United National Breweries (UNB), a South African company. UNB is the leading brewer of traditional beer and owns the Chibuku brand in South Africa. Efforts are underway to finalise the transaction based on agreed timeframes,” he said.
Mr Gambiza said Government’s macro-economic policies have heavily impacted on their business operations, noting that the recent loss of value of the RTGS dollar against other currencies was pushing inflation and adversely affecting demand for their products.
“An update on how we view the environment that we operate in.
“The fiscal and monetary policies that were implemented between October 2018 and February 2019 have really had a significant impact on the trading environment where we operate as Delta.
“What comes to mind is the two percent transactional tax that was introduced, the adoption of the RTGS as a functional local currency and the introduction of an interbank rate to the RTGS,” said Mr Gambiza.
“The acute shortage of foreign currency has persisted despite the introduction of the interbank foreign exchange market. So these are the things that have impacted on our business.
“We really believe that the foreign currency exchange rate must be supported by more robust measures to complement the fiscal and monetary policies.
“As a company we are pretty much concerned about our ability to access foreign currency in order to meet our external obligations.”
Mr Gambiza said the company has also recorded a decline in the consumption of some of its lagers and attributed the trend to the general slowdown in economic activity.
He assured customers that they should start seeing some of the Delta products, which were off the shelves, back on the market.
“Operations have since resumed although at a slow pace, you have seen some of your favourite beverages starting to come back to the market.
“There are still ongoing collaborations and interventions between the Coca-Cola Company and ourselves as Delta to restore the business to a sustainable footing. So a lot of effort is being put and you can be assured of a much better performance,” said Mr Gambiza.
He said the company was also expecting the group’s revenue to increase by 33 percent in the first quarter while annual revenues should be up by 26 percent.
Mr Gambiza said their financials were expected to be distorted due to the operating environment.
The cocktail was attended by Delta business partners and the press among other stakeholders.