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Business Reporter

NAMPAK Zimbabwe says it is aiming to boost capacity through strategic acquisitions, the expansion of its product portfolio, and investments in cutting-edge technologies.

“Various projects are under active consideration and may be pursued subject to the availability of foreign exchange,” said group managing director John Van Gend.

During nine months to June 30, 2023, the company invested $2,8 billion in various projects. Mr Van Gend said the company’s order book across its operating units remains firm despite the liquidity crunch in the market, which has resulted in more domestic transactions in foreign currency.

He said the plastic packaging industry was witnessing a shift towards sustainable and eco-friendly products, such as biodegradable plastics. However, by leveraging its strong brand reputation and extensive distribution network, Nampak Zimbabwe is well-positioned to introduce innovative products that align with the latest industry trends.

The group’s revenue for the nine months to June, stood at $413,2 billion, grew by 41 percent in inflation-adjusted terms compared to the prior year period, while revenue in historical terms for the same period, at $117,2 billion, depicting a 671 percent above the prior year period.

“Marginal volume improvements and inflationary pricing were the major contributors to the revenue growth. The group also benefited from improved USD collections in the quarter on the back of constrained Zimbabwe dollar liquidity, most of which was deployed into working capital to meet customer demand,” said Mr van Gend.

He said the company remained profitable despite the inflationary pressures pushing up the cost base. The group cash balances were $24,6 billion at the end of the third quarter, mostly due to export receipts at the close of the period under review.

Mr van Gend said most of this balance would be applied towards stock replenishment and the settlement of trade payables.

In terms of segmental performance, sales volumes at Hunyani Corrugated Division for the third quarter were 5 percent up on the prior-year period. Sales volumes into the tobacco market were 12 percent ahead of the same period last year due to an improved tobacco crop.

Mr van Gend noted that although demand for commercial carton volumes remained firm, volumes were 12 percent down on the prior year due to constrained raw material supplies.

“The Cartons, Labels, and Sacks Division sales volumes for the third quarter were 7 percent up on the prior year due to improved demand for tobacco paper wrap. Other commercial packaging was in line with the prior-year volumes for the third quarter,” said Mr van Gend.

In the plastics and metals segment, at Mega Pak, third-quarter sales volumes were down by 7 percent compared to the prior-year period.

“Despite firm demand from our customers, rolling power cuts negatively impacted the operation’s ability to meet customer demand,” the company said, indicating that additional generator capacity has been installed to mitigate the impact of the power cuts.

At CarnaudMetalbox, sales volumes in the third quarter were 9 percent above the same period last year, and plastics led the recovery, buoyed by higher HDPE bottle volumes, which were 36 percent above the prior year period.

However, metal volumes were 17 percent down on the prior year.

In the forestry segment, horticultural development at the Maganga Estate near Macheke is progressing well. Mr van Gend said the group would continue to focus on cost containment measures in order to improve profitability across all the businesses.