Delta spending US$160m on new bottling lines

DELTA Corporation will invest US$160 million in new bottling lines, packaging glass and boost capacity of its mothballed plant in the next three years in anticipation of growing demand for beer and beverages, CEO Joe Mutizwa says.

Mutizwa says the beverage and beer maker last year spent US$46 million on a new bottling line and glass.
He said: “We are spending US$160 million in the next three years in capital expenditure. The money will go into a new bottling line, carbon dioxide plant and glass.”
Mutizwa says the glass will reflect a new up market look to its products.
Already, some of the carbonated beverages –– Sprite and Fanta –– have been given a new up market look.
Delta will this year commission a US$14,5 million beer bottling line in Bulawayo, invest US$1 million in a carbon dioxide plant and US$13, 1 million in returnable glass.
According to the company, the US$14 million bottling line will have a capacity of 42 000 bottles an hour.
An additional $12,5 million will be invested in the Southerton bottling line and mothballed brewery in Zvishavane that came back on stream last year.
Management hopes this will lift output to meet growing demand.
Delta hopes the planned investments in bottling lines buoyed by an earlier investment last year will position the company to meet growing demand.
“By the end of March 2010, in excess of 50% down payments had been made towards two significant new items of plant. A new pet plant for soft drinks, which will come on line in June 2010,” Delta chairman Robbie Mupawose said in a statement attached to the group’s financial results to March this year.
The group said demand is firm and sales are rising.
Beer sales grew 113% this year but Mutizwa says there is still an upside to burn in terms of beer sales arguing that Delta is still to reach its peak sales of 2002. He says the company has only gone back to sales of 2006. April sales grew by 78% to 135 000 hectolitres compared to last year’s 76 000 hectolitres.
Although Delta did not disclose the value of the April sales, last year Zimbabweans spent US$23 million on beer in the same month.
Mutizwa says this is a magnificent sales feat traditionally achieved in the last quarter of the year. Mutizwa says although the figures look great, consumption numbers are much lower than 2005 numbers.
The group’s turnover stood at US$330 million, a growth of more than 100% compared to last year’s 130 million. He says the company sold its shareholding in Malbruk, Mandel Training Centre and Headend –– as part of efforts to divest out of non-core businesses. Net profit attributable to shareholders was US$39 million.

 

Chris Muronzi

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