Home » Industry » Delta Expedites U.S.$17 Million Chibuku Project

CONSTRUCTION of Delta Corporation’s US$17 million Chibuku plant at Fairbridge, just outside Bulawayo, will get underway in the next few weeks after the country’s biggest brewer last week received the first batch of equipment from Germany and South Africa, the Financial Gazette’s Companies amp Markets (CampM) can reveal.

The delivery consisted of the main packaging plant procured from the world’s leading packaging and bottling machine manufacturer, Krones of Germany and brewing and fermentation tanks from Interfab of South Africa.

CampM understands that the remainder of the equipment, which consists of brewing and refrigeration plant sourced from GEA Process Technology of South Africa and grain silos from Cimbria of Denmark, are now expected in the country early next month.

Alex Makamure, the company secretary for the cash-rich beverages’ firm which is listed on the Zimbabwe Stock Exchange, confirmed the company had received the first batch of equipment, saying the remainder would be delivered next month.

“We have started receiving the plant from Krones and tanks from South Africa with the remainder of the equipment expected in April,” Makamure said, adding that the new plant would be commissioned by June this year.

“The project, inclusive of civil works and ancillary services, will cost US$17 million,” said Makamure.

The civil works commenced in September last year.

Once the new opaque beer plant, designed in Germany, is brought on line, the company projects national capacity for Chibuku Super to increase to 3,5 million hectolitres per year, closing the supply gap that is being experienced in the market.

“The plant will produce both Super and Standard Chibuku and will have a Chibuku Super capacity of just over 1,5 million hectolitres.

The proposed Fairbridge brewery will produce both Super and Standard Chibuku. Delta currently serves the entire country from with its Chibuku Super from its plant in Chitungwiza but the two lines at the plant cannot keep pace with demand.

Fairbridge brewery would supply the southern region including parts of Midlands and Masvingo provinces, complementing the supplies from Chitungwiza Chibuku Super Plant.

Delta Corporation, which is partly owned by global brewing giant SABMiller, has recorded higher sales for the opaque beer brand nationally.

The low-cost, mass market sorghum beer — Chibuku Super — is key to the growth of the group’s revenue as it turns to markets previously dominated by informal players in the face of slowing clear beer volumes.

Delta Corporation unveiled the Chibuku Super in 2013 adding momentum to the traditional beer segment which contributed about 60 percent of the brewer’s annual volumes.

Chibuku Super is a shelf stable, constant Alcohol by Volume product which was introduced to the market last year featuring bold and innovative new packaging in an embossed PET bottle.

The launch of Chibuku Super in Zimbabwe was a result of a bold and ambitious goal by SAB Miller to roll out the Chibuku brand to several sub-Saharan African countries to tap into the fast-growing beer market across the continent.

Last year, SAB Miller’s unit in Zambia, piloted the Chibuku Super and has been unable to meet market demand for the product.

Chibuku Super addresses some of the shortcomings of the legacy products by way of improved shelf life, package efficacy and quality consistency.

Delta started with an initial US$6,5 million investment into Chibuku Super in 2013 and followed that up with a US$12 million investment in 2014.

Delta Corporation reported a 20 percent drop in larger sales for the first nine months to December 2014, reflecting a slowdown in Zimbabwe’s economy, with volumes for Chibuku rising while lager beer sales volumes declined.

Source : Financial Gazette