Zimbabwe: Scarcity of foreign currency threatens Delta Corporation’s business

Delta Corporation says the viability of its Shumba Maheu business unit with a monthly turnover of over US$1 million is being threatened by the scarcity of foreign currency required to import packaging material, the Zimbabwe Independent reported on May 4.

The brewer established the Shumba Maheu business unit in 2015 as part of the beverages manufacturer’s plans to diversify.

Before local production of the Shumba Maheu product brands, Delta used to import the starch-based non-carbonated and alcohol-free beverage from an associate company in Zambia.

The southern African country is currently crippled by a debilitating foreign currency shortage that has hampered manufacturers from importing key raw materials required to sustain operations.

Delta company secretary Alex Makamure told businessdigest that the acute shortage of foreign currency—which has also impacted severely the operations of the brewer—was struggling to source packaging material from South African-based firm Nampak.

Shumba Maheu sources the bulk of its packaging material from Nampak.

Some of the core raw materials imported by Delta required to sustain operations at Shumba Maheu include flavouring and milk bases.

“Our businesses rely on both direct and indirect imports. For Maheu, packaging is supplied by locals but has high import content.

“We import some flavours, spares and milk bases for Supersip.These are less than US$100 000 per month. The real challenge is packaging material as supplied mainly by Nampak in the form of high-density poly ethylene (HDPE) material,” said Makamure.

Sources at the Shumba Maheu plant situated in Harare’s Willowvale industrial area said production of the Maheu product had dwindled owing to limited packaging material, among other imports.

The prevailing forex shortage has also affected the brewer’s other key business operations, namely the soft drink and opaque beer business units.

The brewer, which was recently acquired by the world’s largest brewer Anheuser-Busch InBev SA/NV (AB InBev) after snapping up a key stake held by SABMiller in the local company, requires at least US$2 million per month to import raw materials required to sustain its Coca-Cola and Chibuku manufacturing business units.

The company is currently engaging government on a plan for the timeous disbursement of forex required to import core raw materials.

Earlier this year, the beverages maker forecast a shortage of its Coke product on the domestic market due to the acute forex shortage.

A range of key raw materials used to manufacture beer and soft drinks in limited supply include malt, carbon dioxide, preservatives, probiotic bacteria and brewer’s yeast.

03 May, 2018