E-Malt.com News article: Zimbabwe: Delta Corporation Limited’s investments in barley contracting scheme total almost $3 mln

Listed beverages manufacturer Delta Corporation Limited says it has so far spent close to $3 million on its barley contract farming scheme targeting a yield of 33 000 tonnes this year, the Chronicle reported on May 2.

Over the years, the beverages producer has financed the production of barley and sorghum through a contract arrangement to boost the crops’ supply at the firm. The two crops are some of the raw materials required by the company.

In an interview, Delta corporate affairs executive, Mrs Patricia Murambinda, said 91 percent of the sorghum under the contract scheme was coming from communal farmers while nine percent was from commercial farmers.

“Looking at malting barley, we have 5 863 hectares which we have contracted and we want to deliver 33 000 tonnes of barley from the 47 commercial farmers that we contracted.

“Under this scheme, we have spent almost $3 million and planting is in progress at the moment and it will continue until end of June,” she said.

Mrs Murambinda said in the 2017/18 season, they contracted 6 957 hectares of red malt sorghum and the company, through the scheme during the period under review, has supported 2 977 households.

“We have supported them to the tune of $250 000 and we are targeting a tonnage of 12 000 tonnes of sorghum this year,” she said.

Although she could not give the previous year’s production statistics off hand, Mrs Murambinda said the current crops production figures were higher largely driven by the volumes increase in the larger and sorghum beer business units.

“As long as the sales volumes are going up in the market, we are sure to engage more people to provide the necessary raw material than we need,” she said.

In January this year, Delta announced that its revenue jumped 24 percent for the quarter to December 31, 2017 and nine percent for the nine months due to strong demand anchored on renewed hope for economic recovery after political changes that occurred in November last year.

For the last quarter of 2017, the Zimbabwe Stock Exchange largest counter by capitalisation said its lager beer recorded a spike in demand with the volume growing by 36 percent above prior year for the quarter and 20 percent for the nine months.

Sorghum beer volumes grew by 10 percent above prior year for the quarter and closed flat for the nine months. The stellar volumes growth during the period was driven by Chibuku Super.

The beverages maker has in the last couple of years been experiencing intermittent declines in revenue, volumes and profitability due to an increasingly difficult economic environment. For the past 50 years, Delta has been supporting barley contract farming. The company contracts farmers mostly in Chiredzi, Buhera, Mutoko and Muzarabani.

In the past, the beverages producer was exporting barley malt to Zambia, Rwanda and Burundi. However, establishment of a malting plant in Zambia has affected demand for Delta’s malt.



02 May, 2018