Forex shortage hampers Delta

DELTA Corporation says the prevailing foreign currency challenges have negatively impacted on its soft drinks and Chibuku operations, which depend heavily on imported raw materials.

Corporate affairs executive Patricia Murambinda told Vice President Chiwenga that Delta’s Coca Cola and Chibuku Super operations had been hit hard by prevailing forex shortages.

This comes as Zimbabwe is realising little from exports due to a frail economy, getting negligible inflows of foreign direct and portfolio investment and has limited access to affordable lines of credit.

The Vice President was told of Delta’s problems while touring some of the exhibitions at the 59th edition of the Zimbabwe International Trade Fair (ZITF) on Wednesday.

Prior to the tour of exhibition stands, Vice President Chiwenga had attended the 12th edition of the International Business Conference at ZITF.

In his address, he said Government was working hard to improve challenges of easy of doing business, including shortage of hard currency.

He also toured companies such as Treger Plastics, which he commended as having regained its old glory, Boltgas, Haggie Rand Zimbabwe and Irvine’s, which is supporting the Command Livestock programme.

Several companies are struggling to secure hard currency for critical imports such as spares, raw materials and equipment

In response, the Reserve Bank came up with a foreign currency priority list framework, which allocates forex foreign currency on the basis of most deserving purpose to importers.

Ms Murambinda said the company was facing challenges securing about $2 million per week (US dollars) needed to import concentrates used in Coca Cola soft drink manufacturing.

She also told the Vice President that the company has not been able to get hard currency for importation of resin, used in manufacturing PET soft drinks containers for its Chibuku Super.

“We are facing foreign currency challenges for our operations as Delta. We are facing serious challenges importing concentrates for our Coca Cola business.

“We import the concentrates from Swaziland and need the forex to pay suppliers. We also import resin for Super Chibuku product. We need $2 million per week to support both Chibuku Super and soft drinks business,” she said.

Ms Murambinda said the Zimbabwe Stock Exchange listed beverages manufacturer had since engaged the Ministry of Industry, Commerce and Enterprise development for assistance

The Vice President said Government was working hard to address challenges companies and the economy were facing. He said under the new dispensation “the pain is over”.

VP Chiwenga commended the company for its exquisite exhibition and encouraged to strive for growth despite the challenges. He said volumes and efficiency were critical for viability.

Earlier at the conference, the VP had said the RBZ had secured lines of credit from the PTA Bank and Afreximbank to ease shortage of cash and address forex shortages in the country.

However, the just over $1,5 billion ($1 billion for nostro stabilisation and $500 million for security guarantees) the central bank secured from lenders, could not close the deficit.

By September last year, the foreign currency payment backlog had grown to nearly $600 million.

The ZSE listed beverage manufacturer said last week that revenue grew by 18 percent in the year to March 2018 driven by growth in lager, sparkling beverages and sorghum beer volumes, the company reported in a trading update.

According to a trading update for the fourth quarter and full year to March 2018, the 18 percent revenue growth includes results for newly acquired Zambian unit, National Breweries (Natbrew Plc).

The acquisition of Natbrew Plc is effective from January 1 this year

Zimbabwe’s biggest beverage manufacturer’s financial results are expected to be published on May 10, 2018. Excluding Natbrew, Delta said revenue for the 12 months period to March 2018 grew by 17 percent. For the quarter, Delta said revenue went up 52 percent (45 percent excluding Natbrew). Natbrew Plc’s revenue registered a 21 percent growth for the quarter on improved product supply.

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