Zimbabwe: Delta Corporation lines up several capacity expansion initiatives

Beverages maker, Delta Corporation, has lined up several capacity expansion initiatives for financial year 2023 as it seeks to meet consumer demand, especially for its sorghum beer segment, The Herald reported on January 24.

The group is angling for growth opportunities in the economy, which local government has projected to grow by 3.8 percent driven by increased activity in the mining and agriculture sectors.

Delta indicated one of the planned initiatives entails bringing back the sorghum beer Scud pack to narrow supply gaps in the segment.

Company secretary Faith Musinga said the installation of the new Chibuku plant at the group’s Harare brewery will also enable the group to increase supply for its recently launched Chibuku Super banana flavour.

“The capital investment projects are progressing according to plan and expected to contribute to business performance in the coming financial period,” Ms Musinga said in a trading update released by the company.

“Banana flavour, which was launched in June 2022, has excited the market, and will see an increased supply once packaging capacity and supply chain bottlenecks are addressed.

“The installation of additional production capacity at Harare brewery is in progress for commissioning during the first half of 2023.

“There are ongoing efforts to optimise the available PET production capacity across the regional countries and to revive the Scud pack to cover supply gaps,” she said.

The developments come as demand for sorghum beer continues to increase both on the domestic and regional markets.

According to figures for the third quarter to December 31, 2022, sorghum beer volume in Zimbabwe grew by 11 percent for the quarter compared to prior year and up 12 percent for the nine months as the category continues to benefit from increased brand activities.

The group recently celebrated the Chibuku brand’s 60th anniversary. In June 2022, the group launched Chibuku Super banana flavour. Delta expects to increase supplies once packaging capacity and supply chain bottlenecks are addressed.

At Natbrew Zambia, the business continues to recover with volumes registering an 11 percent growth in the nine-month period, including exports into some regional exports. Ms Musinga said there were opportunities to grow the returnable packs and flavoured offerings.

Volume at United National Breweries South Africa remained flat for the quarter but grew by 21 percent for the nine months, reflecting the disruptions to operations arising from power cuts and reduced market service by resellers and distributors in response to fuel price escalations.

But there are opportunities for growth in that market, according to Delta.

“There is an encouraging uptake of Chibuku Super, which is being seeded into the market ahead of the planned investment in local production capacity in the coming financial year,” said Ms Musinga.

The group is also working on enhancing capacity for the PET packs whose supplies have remained constrained during the third quarter period.

Despite the challenges, the sparkling beverages segment recorded volume grew by 5 percent for the quarter and 14 percent for the nine months.

24 January, 2023