Zim saves $12 million in foreign currency per year through Natpak

PACKAGING company, Natpak says Zimbabwe is now saving $12 million in foreign currency per year thanks to local production by the company’s second production line that was commissioned during the 2017 financial year.

In a trading update for first quarter of financial year 2018, listed giant, Innscor Africa Limited said its subsidiary Natpak looks forward to diversifying its capabilities through an investment into corrugated packaging.

“We estimate that the localisation of manufacturing flexible packaging through our plants, critical to many key players in the manufacturing space in Zimbabwe, is now saving the country an estimated $12 million in foreign currency per annum,” said the group.

On National Foods, another of its subsidiaries, Innscor said profitability for the quarter largely met expectation as the products traded last year through the depot network did not contribute a significant margin and costs were well controlled as the on-going work on the cost base continues to take effect.

“The business continued to invest in extending its pipeline of key raw materials.

“To this end, working capital increased by $9.3 million during the quarter to $88.3 million and we have a good pipeline of raw materials in most of our key categories at this point,” it said.

It said revenues from its bakery division, Baker’s Inn, continued to show good growth on the back of a 13 percent increase in average loaves per day sold versus the comparative quarter.

The improvement is attributed to the introduction of the new family loaf which was very well received by the market and accounted for 47 percent of total loaves sold in the quarter.

Colcom’s total volumes were seven percent behind the comparative period, with the decline emanating from the fresh pork lines.

“Pleasing volume growth was however recorded in the processed lines, driven in particular by a successful, targeted focus on the bacon category.”

Innscor said its poultry producer, Irvine’s remains in a recovery phase following the Avian Influenza outbreak in the middle of the year.

“There have been no further outbreaks of the virus since we last reported, and we expect the sites to exit the quarantine phase this month, at which point re-stocking can commence.

“The business incurred a final impairment charge of $2.042 million during the quarter under review, and this was mainly in respect of feed on the infected sites that was destroyed post the yearend.

“While volumes of processed chicken have now been restored, the business is not receiving the full foreign currency support to ensure that the necessary volumes of day old chicks can be imported to satisfy normal demand for chicken producers while the breeding stock is rebuilt,” said Innscor, adding that egg production remains at around 43 percent of normal capacity.

The group’s overall revenue growth during the period under review was marginally lower than the previous quarter.

“But a slight increase in the gross margin percentage ensured that margin dollars showed positive growth,” said Innscor.

The group remained positive with regards to the country’s economic recovery prospects. — @ thandyfeminine