Zimbabwe: Delta Corporation struggling to make all its lagers available as shortage of foreign currency threatens glass package procurement
Delta Corporation Limited, Zimbabwe's largest beverage marker, is making frantic efforts to ensure the availability of all its assortment of lager beers in the wake of the prevailing foreign currency shortages to import packaging material, Bulawayo24 News reported on December 16.
In an exclusive interview with Sunday News Business, after the commissioning of a $260 000 upgrade of a road junction that links its Fairbridge Chibuku Super plant with the Harare-Bulawayo Highway, Delta Corporation general manager — Lager Beer Business Dr Munyaradzi Nyandoro said unreliable foreign currency availability for the procurement of glass package was threatening production of its selected beer brands.
"We have one way glass. For some of our brands, which we put on what we call dumpies (disposable bottles), that's a huge import bill. We get that from South Africa. You know your Castle Lite and others, so that's a challenge because you know foreign currency is not easy to come by.
“We spend about $12 million a year, which is quite something. We have obviously been running credits with our suppliers but they will obviously need to be paid some time, so if we don't get support unfortunately it might mean that some brands might run out from time to time, as we depend on the formal channels to get forex, which is the RBZ or the banks themselves, but we will try ways of creating forex," said Dr Nyandoro.
He, however, said there were little problems with regards to the availability of non-disposable bottles.
"A lot of our glass is returnable and so we take it from the bucket and then we wash it and then we package, that's about 80 percent of our business for Lagers," said Dr Nyandoro.
Delta needs between $60 million to $75 million to meet foreign obligations annually for procurement of various strategic raw materials and has been struggling to get that allocation from the central bank. Dr Nyandoro said the shortage faced three months ago was due to temporal unavailability of the appropriate barley for beer manufacturing.
"I do know that we ran out of barley in September. So we used new barley, which is always difficult to process so that was constraining in the factory. It's a phenomenon called dormancy. You have to allow the grain about two-three months if you want it to perform maximally, otherwise you would be lengthening its processing time and also even in the brewing process so that was the main thing in September and October but now we are out of it and our plants are working 24/7 at maximum capacity," he said.
Dr Nyandoro said production on the Lager business was at maximum capacity with the company producing 200 000 hectolitres per month, an equivalent of 20 million litres of beer a month. He allayed any fears of shortage of glass-bottled beer during the festive season.
"On the lager side we are fully maxed at maximum capacity, there has been an upsurge in demand and we intend to invest again in expanding capacity. We have sufficient barley next season as you know barley is locally grown, we run contracts for barley so we are trying our best to ensure people have a good Christmas. We can't say we will provide everything but I think people would have a good cheer over Christmas for Lagers," Dr Nyandoro said.
He said due to an upsurge in demand for its Lagers, the company has made plans to set up an additional packaging time at its Harare plant.
16 December, 2018
