HomeBusiness DigestStrong order book buoys PG exports

Strong order book buoys PG exports

Conrad Dube

EXPORT volume growth at PG Industries Ltd (PG) has been very strong buoyed by a firm order book at Safety Glass and Zimboard, chief executive Gerald Mujaji has said.

“Our exports have been very strong and we have seen steady volume growth at Safety Glass and Zimboard in Botswana, Zambia, South Africa and Mozambique,” Mujaji said.

He said the increase in export volumes was a result of the group’s policy of targeting volume growth.

The company expected export contribution to group turnover to increase by about 7% to 35% this financial year from 28% last year.

Mujaji said the group’s export order book was firm barring the seasonality of the business.

The group had seen very good auto-glass, windscreen and fiberboard volumes in Tanzania. Tanzania is PG’s third single largest export market after South Africa and Botswana, he said.

Mauritius, a developing market, according to Mujaji had also helped push export volumes.

The chief executive said PG was part of teams exploring the Angolan and other markets in the region including the Democratic Republic of the Congo and Kenya.

In the year ended March 31 export sales grew by 435% to close the year at $6,7 billion, which was 28% of group turnover resulting in attributable earnings of $4,6 billion compared to $704 million the previous year.

Plans to increase plant capacity by 50% at PG Safety Glass are at an advanced stage. The increase in capacity was in response to the increased demand in regional and international markets. This, according to Mujaji, would provide for further growth in export volumes especially for the US market.

The group would seek to maintain volume growth in key markets with a view to increase in line with inflation, he said.

An investment analyst said PG fitted very well in Angolan and DRC markets, which are currently undertaking post-war reconstruction because of the range of products the company offered.

PG Glass has linked up with Mr Exhaust Mr Tyre in a venture to distribute the fusalite windscreens where PG would have access to Mr Exhaust Mr Tyre’s 22 outlets.

The group is in the process of acquiring a strategic business which analysts said would enhance earnings capacity.

Turnover at Johnson and Fletcher grew almost four-fold to just over $1 billion, with operating income increasing more than eight times.

As its entire turnover is cash, this business is a key contributor to the group’s cash generation.

The company introduced the Ready to Assemble (RTA) range of products being marketed in association with PG Bison of South Africa.

PG shares closed at $377 on Wednesday this week.

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