Cereal output decline affects Delta

THE decline in cereals output, owing to a poor agricultural season, led to a marginal decline in Delta’s first quarter volume performance.
Volumes in the first quarter were down a marginal 1% after sorghum beer volumes dropped 6%. Delta CEO Pearson Govero told an AGM that performance of sorghum beer volumes had been affected by the poor rains and the delay in the cotton marketing season.
Govero also said that a price increase for Chibuku opaque beer at the beginning of the year had resulted in a knock on its sales. He added that the liquidity challenges the economy was facing had resulted in the flat growth of sparkling beverages after the group moved in to tighten credit terms.
The group said realigning its wholesale discount had also caused a dip in uptake.
In the quarter, lager beer volumes were however up 10% at 505 000hls, while sparkling beverage volumes were flat. Plastic packaging volumes were up 20%. On a quarter to quarter basis, volumes were up 4% from March while they were 1% down against prior year due to inadequate sorghum.
In the first months, lager volumes remained at 10%, sorghum beer was still down 6%, sparkling beverages had turned round with a 6% growth on last year, leading to total beverage growth of 5%.
Revenue in the period was up 15% to US$165 million. Govero saidearnings growth remained strong, driven by the product mix and the value chain.
On the associates, Afdis’ performance was in line with expectations, while Schweppes Zimbabwe volumes in the period had been impacted on by price quality and supply issues. A new hotfill line had been commissioned at the end of June while new products had been launched under the Minute Maid brand.
A new packaging line was being commissioned at Southerton while a PET line for Bulawayo would be commissioned in November. The group said investment in the PET packaging capacity had put the business in a very strong position, as most of the competitor propositions were in that form of packaging.
Without giving further details, Govero said there would be new innovations on Chibuku beer.
The group had also deployed handheld terminals for the sales force and would soon move into the local production of non–refundable bottles for the full lager brand portfolio.
Govero said raw materials were stable and the focus was on reducing value chain costs.
The group is expecting a 15% growth in revenue in this current financial year. — Staff Writer.