Delta to invest $17m in new Chibuku plant

DELTA PLANT-19-02-15

Delta employees monitor one of the Chibuku Super plant production line in Chitungwiza yesterday


Business Reporter—

DELTA Corporation will spend about $17 million on setting up a new Chibuku Super plant at Fairbridge in Bulawayo, as the group moves to keep pace with growing demand. The country’s biggest beverages manufacturer is in the process of setting up the new plant with capacity to produce about 337 000 hectolitres a day.

Delta is currently producing Super Chibuku beer at its plant in Chitungwiza, but the two lines at the plant, with capacity of 600 000 litres per day, cannot keep pace with demand.

The brewer of lagers Castle, Zambezi, Black Label and Lion and Castle Lite, among others, currently serve the entire country from Chitungwiza due to the beer’s long shelf life.

Chitungwiza Chibuku Super plant manager Mr Joseph Takaindisa said Delta was in the process of procuring equipment from Germany for the plant to be set up at Fairbridge.

“It is supposed to start running in March, but it will be commissioned in May. It will have three quarters capacity of the 450 000 litres a day capacity of this (Chitungwiza) plant,” he said

“We are already selling Super Chibuku in Bulawayo, but we will soon be producing from there. The plant will cost about $12 million and equipment is coming from Germany,” he added.

Chitungwiza plant manager Mr Mark Mudimbu said the demand and volumes for Super Chibuku were growing fast, which was partly the reason a new plant was being set up.

“We cannot meet the demand, which is partly the reason we are rolling out a new plant,” he said.

It was against this background that Delta is optimising production in Chitungwiza.

The Chitungwiza plant, running at about 70 percent capacity produced 3,5 million hectoliters last year.

Delta is making additional investments to optimise production capacity.

Mr Mudimbu said to increase the plant’s current production run, Delta was investing in services that support production such as cooling systems and water storage facilities.

He said while Super Chibuku had registered tremendous growth, Chibuku Scud was still accounting for a larger share of volumes of the two Chibuku brand beer products.

Delta started with an initial $6,5 million investment into Chibuku Super in 2013 and followed that up with a $12 million investment in 2014 to triple production capacity to 1,8 million litres.

Company secretary Mr Alex Makamure last year said the beverages company was in the process of rationalising production of Chibuku Scud after overwhelming success of Chibuku Super.

As such, Delta has since closed breweries in Chipinge Marondera, Hwange, Mvurwi, Karoi and Zvishavane with the seven remaining breweries enough to cater for demand.

The group has in the past said the significant leap in production innovation and technology had made the establishment of mega breweries possible, releasing capacity at other plants to demand.

The rationalisation programme for Chibuku Scud will depend on the success and impact of Chibuku Super, as Delta reviews interplay between Harare, Marondera and Rusape.

Delta’s previous 15 breweries that were dotted across the country were largely in consideration of Chibuku Scud’s short shelf life of four days compared to Chibuku Super’s 21 days.

Delta reported a 4 percent decline in revenue to $302,2 million in the half year to September 2014 while operating income also decreased by 9 percent to $57 million.

Earnings before interest, tax, depreciation and amortisation also decreased by 4 percent to $74,4 million with earnings per share following suit after easing 7 percent to 3,55 cents.

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