Delta invests $78 million in Chibuku Super plants
DELTA Corporation has invested about $78 million towards upgrading Chibuku Super plants in the past two years while further investments will depend largely on state of the economy.
Delta, the largest brewer invested $28 million and $21 million in upgrading Chitungwiza and Fairbridge plant in Bulawayo, respectively. An additional $14 million is being invested in Masvingo and $14,5 million Kwekwe.
The upgrading of the two plants, which will push annual volumes to 4 million hectolitres will be completed by October.
“We might be looking at Manicaland but that will depend on the state of the economy,” Delta company secretary Mr Alex Makamure said during a plant tour in Masvingo yesterday.
The investments have seen Chibuku Super contributing 60 percent of the opaque beer, overtaking the traditional Chibuku Scud.
Chibuku Super was introduced in 2014. Then, Delta was producing about three million hectolitres, but volumes have halved while volumes for Super have increased to two million.
The five months volume for the current fiscal year are trending above 10 percent on increased Super volumes. Thin disposable incomes due to the prevailing liquidity constraints have seen drinkers opting for cheaper opaque beer than premium priced lager beers.
The price for a two-litre Chubuku Super is $1 but can be reduced if the agricultural value chains improve, particularly maize yields to support competitive producer price.
Mr Makamure said Masvingo and Kwekwe plants were running slightly behind the initial commissioning target due to delayed shipment of some equipment over delayed payments.
“We couldn’t pay for some of the foreign supplies on time . . . that is why the projects have delayed,” said Mr Makamure.
“In fact we have a payment backlog of about $25 million including dividends.”
The company is due to pay dividends amounting to $15 million.
Delta has outsourced most of the services from local companies — 29 in Masvingo and 32 in Kwekwe.
The major costs incurred were for the Chibuku Super PET packaging plants and brewing tanks, grain handling equipment and civil works. The key element of the plant is packaging technology from the Germany firms and several South African companies.
Currently, Kwekwe and Masvingo employ 58 and 65 workers, respectively and both will have full staff complements of 84 upon completion of the factories, the company said.
“There will be an increase in the skilled grades who operate the automated lines,” said Delta.
It said following the closure of seven breweries, the total headcount in the sorghum business has marginally decreased 11 percent to 1274 from 1 400 .