BY SHAME MAKOSHORI
ZIMBABWE’s biggest piping products maker, Proplastics Limited says it is to commission a new line early next year, its second investment in 18 months.
Chairperson Gregory Sebborn did not disclose how much the listed outfit will spend on the asset in his commentary to financial results for the half year ended June 30, 2021.
But the big move underlines Proplastics’ ambition to make inroads into several domestic and regional markets in which it plans to establish a footprint, according to analysts.
They said the new investment demonstrated stronger resilience capacities brought by Proplastics’ US$1 million investment into a modern plant commissioned last July.
For Proplastics expanding capacities will be handy as demand has been building up across markets since Covid-19 induced hard lockdowns were relaxed most of this year, as the government tried to balance between shutting down firms and keeping the economy afloat.
“The new PVC 500mm extrusion production line is expected at the end of the year for commissioning in the first quarter of 2022,” Sebborn said.
“This new line will help address the demand for large bore PVC diameter pipes, which continues to grow and will increase production capacity. Demand for the group’s products was, however, strong in the period under review and, as a result, the performance for the period was encouraging,” Sebborn noted.
Proplastics rolled out its US$1 million factory last year, drastically trimming costs and improving efficiencies.
However, even as pandemic induced hurdles appeared to cool off, Zimbabwe’s industries still face foreign currency shortages.
Sebborn said Proplastics’ unsettled debts to foreign creditors during the period were US$1,7 million.
“The position exposes the group to huge exchange rate risks as well as negative impact on supplier relations. We urge the authorities to address this matter with urgency as the massive delays are now a huge performance hindrance for industries and the economy at large. Moreso, the gap between the official exchange rate and the alternative market offering continues to widen,” he said.
The firm’s inflation adjusted profit for the period was $57 million (about US$663 000), compared to a loss of $58 million (about US$674 000) during the same period last year.
Turnover grew by 120% to $889 million from $404 million in the prior period on the back of a 71% increase in sales volumes.
Exports grew by 240% and contributed 11% of total turnover during the period.