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Tinashe Makichi Business Reporter
Art Corporation’s ball pen manufacturing division, Eversharp is expecting to increase production by 100 percent this year following the purchase of new equipment and technology by the group.

The new machinery will see Eversharp doubling its current capacity to eight million pens by the end of 2016 from the current four million.

The group last year started drawing down from the $18 million facility offered by Taesung Chemical Company Limited that has enabled the company to purchase new equipment and machinery.

Chief Executive Mr Richard Zirobwa during a private tour of the new facilities yesterday said the company’s drive to purchase new equipment is aimed at improving economies of scale.

“The group is currently trading in a considerably difficult operating environment characterized by tight liquidity conditions and poor market demand hence the need for the company to be innovative through bringing in new technology that makes the company globally competitive.

“I am pleased to advise that having fulfilled the terms of the facility, the group has now commenced drawing down on these facilities from our Korean partner,” said Mr Zirobwa.

The Art Corporation board has approved facilities offered by Taesung Chemical of up to $3 million to finance raw material purchases and up to $15 million to finance capital expenditure over a period of five years.

Total upgrade of the phase one of Eversharp costed $400, 000 and phase two will cost the same amount. All work on phase one has been completed and it is now left for the shareholder to push management to deliver.

“We are talking about four million pens and we have doubled that capacity by also increasing production capacity of other products around the pen and the idea is to reduce our costs and achieve regional cost competitiveness.

The machines we will be using from now are the latest in the world today and that is comforting. Eversharp should be a different Company in 2015,” said Mr Zirobwa.

He said the shareholder is ready for Phase two of the projects and management is trying to looking at the cash flows and this depends on the company’s ability place its cash flows to be able to match the expectations of repayments.

“Generally speaking we are keen to see phase two completed again in the current year. We eye a complete repositioning of Eversharp,” he said.

The commissioning of the new machine will see a significant reduction in cost of production which should improve margins and profitability further in the coming year.

He said Eversharp is currently failing to meet the market demand of about five million pens during peak periods as the current production capacity remains flat at four million pens due to lack of new machines.