Proplastics Ltd has a strong US$2,2 million order book buoyed by building projects and government’s irrigation revival programmes and mining, a company official said.
Company CEO Kuda Chigiya last week told businessdigest in the capital that the company’s order book was strong, benefiting from building projects and government’s irrigation refurbishment exercise.
“We have seen individuals, government and non-governmental organisation coming into play.
NGOs are financing various irrigation refurbishment projects,” he said. Chigiya said the company’s near orders amounted to US$6 million while prospective orders stood at US$15 million.
However, he bemoaned the power crisis currently gripping the country, saying it had hit the business.
“Basically there is lost production time. When power goes, you lose the product. Also your lead times are extended in terms of supplying the product.
That makes us less competitive than the South Africans because they have uninterrupted power supplies that makes them very competitive. Because they can produce on time, they can take us to the cleaners,” Chigiya said.
Asked on the monetary losses stemming from the power outages, he said the company had not done the computations of the loss yet given an outage of this scale was a first.
Proplastics relies on the same power line as residential areas such as Mbare and Waterfalls. Chigiya said the company had engaged Zesa on the power situation with a view to finding a solution.
He said his company was experiencing power cuts of up to 12 hours, forcing them to resort to generators, which increased costs six times. Proplastics equipment was damaged in June because of a high voltage incident.
“We are still assessing the extent of the damage caused by the high voltage. Its full effects tend to take time in machines,” Chigiya said.
He added that the weakening of the South African Rand against the United States dollar had also rendered exports uncompetitive.
Proplastics Ltd posted a profit of US$262 896 for the first six months ending June 30, a 43% rise over the same period last year aided by increased revenues.
Sales volumes increased by 11% to 1 948 tonnes, which led to an increase in turnover by 13% to US$6, 6 million.
Merchants contributed 47% to revenue, civil projects chipping in with 36%, while irrigation contributed 12%.
Mining and BH Drillers contributed a negligible 5% to revenue combined.
Chigiya said the company would leverage on the cash-generating capacity of the business.
Proplastics had one major capital injection in the form of a moulding machine, which the company bought from Germany at a cost of US$250 000 this year.
Total cash generated from operations contributed 9% to revenue for the period.
Overheads grew by 11% to US$1 million.
Proplastics is focused on building, selling and supplying pipes and was established in 1965.
Proplastics was unbundled from Masimba Holdings and listed on the Zimbabwe Stock Exchange on June 8.
He said the company would be increasing exports to Zambia, the Democratic Republic of Congo and Mozambique.