Soft Drinks Production Up 20%

Delta Corporation says that soft drinks production capacity has increased by about 20% since the commissioning of the $2 billion bottling plant in November last year.

The plant has a capacity to produce 42 000 bottles per hour.The group said the canning line at its Southerton plant has been modified through an investment of some $200 million to give it capability to can soft drinks which were previously imported from Namibia."Local canning of soft drinks fully commenced in December last year and we expect improved contributions from the plant," said corporate affairs executive, George Mutendadzamera. He said the biggest constraint faced by the soft drinks division was the unavailability of glass containers as a direct result of the collapse of the only clear furnace at Zimglass last year.

Mutendadzamera said more recently the major constraint in this business has been the shortage of sugar arising from the inability of the Zimbabwe Sugar Refineries to get timely deliveries of raw sugar and coal, both of which are a result of logistic problems facing the National Railways of Zimbabwe.

"The situation is set to improve as a result of initiatives that are currently underway," he said.

He, however, could not be drawn into shedding light into what initiatives the company had taken.

He said the lager division had performed exceptionally well for the year to date, adding that volumes were significantly ahead of budget, driven by the spectacular growth of the 750ml value pack which has gained "exceptional market acceptance".

Delta allayed fears of a beer shortage, saying that there was sufficient production capacity and raw materials to satisfy any increase in demand for beer.

"Although we will need to import a little bit of barley for our malt export requirements, sufficient crop has been brought in from last year's winter harvest to meet all our barley malt export requirements," Mutedzamera told businessdigest.

He said the company was on course with the thrust on operational efficiencies and overhead cost reduction. This effort is assisted by the implementation of the World Class Manufacturing Strategy (WCM) which Delta is implementing with the assistance of SAB Miller who are the world class leaders on such projects.

"It is our expectation that we will achieve significant improvements in operating efficiencies for the next two to three years as a result of this initiative," said the Delta executive.

He revealed that Delta's strategy to enter new markets has been launched and the company recently made entry into the Angolan market in partnership with Zimtrade.

If this model succeeds, the group hopes to roll it out to other significant markets.

Volumes in the Chibuku division are also ahead of forecast and budget driven by an upsurge in consumer demand, the company said. The supply of critical raw materials such as maize and sorghum has been stable through a combination of local supply and imports. Delta said significant contracts have been made by farmers for the 2002-2003 season for both maize and sorghum.

"Despite the bad weather pattern of the season to date, it is our expectation that the contract scheme will play a significant role in giving assurance of raw materials supply through to the next season," Mutendadzamera said.

He explained that this is particularly so because the contract scheme has been structured more in favour of sorghum which is drought resistant.

Delta said the maltings business continued to perform exceptionally well with malt exports significantly ahead of last year.

The company also revealed that the packaging business at Ruwa has performed ahead of expectations in both revenue and volume terms for the nine months to December.

Delta shares closed at $162 on Wednesday, a six percent gain on the week.

600450 Soft Drinks Production Up 20%
Date: 27 January 2003
Source: All Africa

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