BY CHIEDZA KOWO
BEVERAGES blue chip Delta Corporation says finalisation of a deal to take over Mutare Bottling Company (MBC) placed it at the heart of a bustling region making up 10% of Zimbabwe’s beverages market.
Company secretary Alex Makamure told businessdigest that the listed giant will flex its muscles within that “territory” from the Mutare plant while shipping cans and PET products from operations in Harare and Bulawayo to scale up volumes. But that will be how far the ambition will go, at least for now.
Makamure said there were no plans for fresh forays beyond established markets in Zambia and South Africa.
“We will continue producing at that factory. We will, however, supply cans and PET (plastic container) packs from our plants in Harare and Bulawayo into the territory. The Mutare territory normally accounts for 10% of national volume,” Makamure said.
“The transaction adds volume to the Delta business. Delta’s lager beer and soft drinks business remains focused on Zimbabwe. There are no current plans to increase the regional footprint of traditional beer beyond the recent expansion into Zambia and South Africa”.
The deal, whose value was not disclosed, was announced last week after a key regulator agreed that it would not create monopolies. It gives Delta’s sparkling beverages franchise fresh growth impetus through forays into a region that has seen investor interests since diamond multinationals trooped to exploit the resource about a decade ago at the end say Delta said instead of said Delta.
Delta produces soft drinks under licence from the Coca Cola Company. The MBC transaction had already attracted market interest since it was announced last year, with researchers at Inter Horizon Securities predicting that it potentially laid the foundation for a 700% growth in revenue during the full year to March 2021. It marked a grand step in Delta’s ambition to mount bases in strategic markets, possibly giving it leverage to enter the nearby Manica Province in Mozambique.
“Delta Beverages is pleased to announce that following the approval of the transaction by the Zimbabwe Competition and Tariff Commission, the Coca Cola Company has extended its sparkling beverages franchise arrangements to cover Manicaland Province,” the firm said in a market update last week.
“This cements the agreement between Delta and Mutare Bottling Company, who were operating in this franchise territory, for Delta to purchase the operating assets of Mutare Bottling Company. This transaction provides an opportunity for the group to provide its range of products across the entire Zimbabwean market. Our customers and consumers in Manicaland will have access to the wide range of the Coca Cola Company’s brands and packs. This also allows the optimal utilisation of the existing assets, including the Mutare bottling plant, and the distribution footprint. The transaction will not result in any job losses,” Delta said.