Firming demand spurs NamPak Zim

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Enacy Mapakame
Paper and packaging group Nampak Zimbabwe Limited’s turnover for the quarter to December 31, 2017 was 16 percent above comparable period prior year on firming demand especially for its beverages related packaging products.

Group managing director John Van Gend said the group has benefited from growth in export orders for its products, while the hot weather patterns have driven demand for beverages packaging.

“We have seen particularly strong demand for beverage related packaging and an upturn in metals related business.

“All units are currently trading profitably, while treasury and cash flow management remains a key focus area,” he said at the group’s annual general meeting.

The group has however been affected by the biting foreign currency shortages currently bedevilling the economy which resulted in the firm struggling to make payments for raw materials imports.

The group, however, embarked on a restructuring and cost control exercise which helped reduce overheads by 3 percent.

On the performance of the group’s divisional units, Hunyani has started the year in a better position compared to same period last year although its turnover went down.

Van Gend said demand for local commercial corrugated products remained high albeit competition from new entrants.

Hunyani has started receiving orders for tobacco boxes for both local and export markets with high prospects, although this will depend on the actual size of the crop this year.

The cartons and labels flexible business has continued on a growth trajectory in both volumes and profitability following a restructuring exercise carried out last year.

Sales volumes at Mega Pak more than doubled in the quarter driven by high demand in beverages packaging mainly the Delta’s Super Chibuku closures and Schweppes products.

“This high demand has now filled up all the spare capacity and part of our intended capital spend will seek to address this,” said Van Gend.

He added the blow moulding sections were running ahead of prior year comparable period while the firm has also received Coke approval for closure introduced in 2016.

At CMB, there has been strong demand in the crowns business with improved food can sales as local canners make a come-back.

But the unit has been hardest hit by foreign currency shortages which resulted in the unit running low on raw materials and failing to fully meet demand.

Management however remains upbeat going forward, with plans to consolidate the market while expanding exports.

“Overall, we continue to look for areas we can rationalise and improve the business, with a focus on cost control, growing our exports and preservation of shareholder value,” he said.

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