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PG’s board plant

PG Industries (Zimbabwe) Ltd says plant utilisation of its board operations has declined to 44% while one of the board manufacturing plants has been shut down for six months due to lack of foreign currency.

face=”Verdana, Arial, Helvetica, sans-serif”>The company said the plant was shut down due to resin supply constraints caused by the severe foreign currency shortage.

“Foreign currency shortages also continued to hamper plant maintenance, adding to downtime, resulting in lower than expected throughput,” the company said in its unaudited group financial results for the half year ended September 30.

PG said that export volumes fibreboard also declined.

It said that the foreign currency shortage presented huge challenges for its glass manufacturing business.

“Acute shortages of foreign currency during the period, seriously constrained manufacturing with throughput reflecting a 16% decline from an already severely handicapped base,” PG said.

The company said that its merchandising operations is experiencing high demand but it continues to be hampered by product availability.

The company said that approvals have been received from the regulatory authorities for both the Zimboard and Glass transactions previously endorsed by shareholders.

Plans are now at an advanced stage for investment by the PG Bison group into the Zimboard operations and shareholder agreements are being formulated to finance capital expenditure on both the particle board and fibreboard plants.

“Further regulatory approvals are now awaited for offshore loans required to procure critical spares to improve plant uptime and production efficiencies,” the company said.

Despite all the efforts by the monetary authorities to stabilise the economy, PG said that the general business climate, however, became even tougher.

“Foreign currency shortages worsened, interest rates jumped to levels above 400%, fuel shortages were more acute and product shortages grew by the day.”

The company said that business in general is expected to remain extraordinary difficult, making the coming months almost impossible to forecast.

During the six months ended September 30, 2005, group’s turnover increased by 216% to $403,3 billion with an operating profit of $54,4 billion in contrast to a loss of $11,5 billion for the similar period last year. – Staff writer.

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