Enacy Mapakame Business Reporter
Paper and packaging group Nampak Zimbabwe says revenue for the six months to March 31, 2019 was ahead of prior year although volumes went down significantly in the plastics and metals segments. It was, however, marginally ahead of the comparable prior year in the printing and converting segment.
Generally, business was negatively affected by foreign currency shortages that resulted in supply gaps especially in plastic packaging.
This was in addition to rising inflation.
At Hunyani paper and packaging, revenue increased over prior year with volumes growing 10 percent. According to Nampak, the corrugated products division experienced higher local and export tobacco box orders but still suffered from stiff competition in the corrugated division from the commercial sector.
On the downside were the cartons, labels and sacks division due to raw materials constraints.
Under the plastics and metals segment, CarnaudMetalbox revenue rose significantly despite a 33 percent decline in volumes as demand was affected by the obtaining illiquidity in the market.
At Mega Pak, revenue went up although volumes were 22 percent lower due to raw materials supply challenges experienced in the market which dampened from the beverage and cordial sectors. Inflationary pressures experienced during the period under review coupled with high exchange rate on the illegal parallel market eroded disposable incomes, resulting in decline in demand.
Nampak is due to release its financial results for the half-year to March 2019 next month.
The group, however, indicated it would continue engaging authorities as it seeks solutions to the challenges affecting business, mainly foreign currency shortages.
The course which the economy will take will have an impact on the performance of the business going forward.
“Macro-economic volatility in Zimbabwe presents a major challenge to the company and has resulted in scarcity of foreign currency coupled with rising inflation.
“The trading environment remains difficult and is likely to remain so for the foreseeable future,” said Nampak.