HomeBusiness DigestDelta surpasses 1998 record volume by 22%

Delta surpasses 1998 record volume by 22%

In 1998 beer volumes were 1,629 million hectolitres and the growth this year was 22% ahead of the record high.

Total volumes for the group rose 19% to 6,908 million hectolitres even though FD Matts Valela said that some areas were undersupplied.

In terms of lager sales by province, Harare still dominates the beer drinkers at 43%, Bulawayo is at 11%, Mash West and Masvingo at 9%, Manicaland at 8% while Midlands was at 7%. 

Incoming CEO Pearson Govero said that overall, there had been a change in the beer mix with premium (green bottles) slowly growing contributing 15,6% from 11,3% last year, the main stream beer lines (brown bottles) eased to 80,4% from 84,1% and economy beers were at 4,05%.

Soft drinks were still 27% shy of the 1998 peak at 1,480 million hectolitres. Govero said part of the reasons why the record had not been surpassed was to do with pricing.

“In the fullness of time, we expect volumes to grow above the record levels,” he said.

Govero noted the group had for the first time fully supplied the soft drinks market.

By province Harare was dominant at 48% as volumes tend to follow urban centres. He said sales volumes were dependent on disposable incomes.
Bulawayo contributed 212%, Masvingo 10%, Mash West 9% and Midlands 8%.

Sorghum growth was also affected by pricing at 3,354 million hectolitres against the 1998 peak of 4,584 million hectolitres.

Govero said the provinces’ contribution presented an interesting picture as Harare was on 21%, Masvingo on 19% and Mashonaland  West 18%.
The group however said it was in the right position to capture the demand.

On the whole there had been a shift in beverages volume contribution in the year with Sorghum still dominant at 49% from 51%, sparkling beverages at 22% and lagers were on 29% from 28%.

Valela said the strategic thrust was to leverage on volumes and grow sales through that. Revenue had grown 36% to US$554,8 million.

The group reported earnings of US6,03 cents  which was within market expectations. The group declared a dividend of US2,08 cents a share.

Though further guidance on the projections for the current year will be given at half year, Govero said that the business would spend US$79 million in capital expenditure.

The group said it would commence local production and packaging of Castle Lite in cans and non-returnable bottles. 

The group would introduce non-returnable bottles for the mainstream portfolio, said Govero.

Installation was in progress for 600 000 hectolitres beer line at Southerton to be commissioned in August 2012. A new soft drink PET line is being installed in Bulawayo.

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