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Oliver Kazunga, Senior Business Reporter

PAPER and packaging group, Nampak Zimbabwe says its capital expenditure projects remain curtailed after it suspended all credit extensions and capital injection by the major shareholder.

In a trading update for the quarter ended June 30, 2019, the group said the capital projects of $2,1 million, the majority of which were carried forward from the prior financial year were spent largely on replacement machinery and were internally funded.

“Capital expenditure programmes remain curtailed following the suspension of all credit extensions and capital injection by our majority shareholder, Nampak Limited of South Africa,” it said.

During the period under review, Nampak said its printing and converting division, Hunyani Paper and Packaging recorded a 116 percent increase in revenue growth compared with the prior year.

“Overall volumes were on par with the prior year. The corrugated products division benefited from higher local and export tobacco box orders but continued to face competition in commercial packaging. 

“The cartons, labels and sacks division volumes declined significantly in the cartons segment due to raw material constraints,” said Nampak.

It said the plastics and metals segment also performed well with Carnaud Metalbox revenue increasing by 78 percent to the prior year with significant upturn in profitability.

Volumes declined by 18 percent compared to the prior year as raw materials supply was constrained by the illiquidity in the market. 

The group also reported that its plastics and metal subsidiary, Mega Pak Mega recorded a 69 percent growth in revenue compared to last year.

“Volumes declined by 26 percent due to dampened demand from the beverage and cordials sectors and raw materials supply challenges,” it said.

On the outlook, the company said the economy was facing strong headwinds.

“It is unlikely that any meaningful relief will be forthcoming to the manufacturing sector until the critical constraints of foreign exchange and power supply are eased,” said Nampak Zimbabwe. — @okazunga