Home » Business » Nampak Zim Invests in Expansion

Nampak Zimbabwe has so far invested more than $5 million since its inception towards expansion and upgrading of its business units, a move expected to increase volumes. Nampak Zimbabwe managing director Mr John Van Gend told the annual general meeting that all units for the first quarter have been trading profitably, while treasury and cash flow management remain key focus areas.

He said a further $3 million worth of capital expansion projects are currently being looked at with final approval expected on these projects by end of March.

He said one of the areas of concern to the group is the proliferation of imported products, particularly coming from South African at what can only be described as penetration prices.

Mr Gend said this is having a material effect on both volumes and margins in certain product areas of business.

Regarding the first quarter update, the company is ahead of budget in terms of turnover, though lagging behind 2014 by about two percent.

Margins remained under pressure, both from customers demand for lower prices and the afore mentioned proliferation of cheap imports.

Hunyani overall started the year reasonably particularly in the corrugated section. Tonnages at Corro were ahead of budget and ahead of the prior year as well.

Mr Gend said this is mainly on the back of spill-over tobacco carton sales and the company is also seeing some growth in the commercial box markets, locally and regionally.

He said the cartons and labels and flexible businesses have not performed as hoped as their markets remained subdued.

“We are also seeing our major customers suffering from reduced demand, which naturally has a knock on effect for us.

“We are however starting to see an increased level of inquiries and if we can turn opportunities into committed orders we believe these two divisions will start to perform up to a level where they start to contribute meaningfully to the group’s results,” said Mr Gend.

He said MegaPak is having a tough start to the financial year and their volumes are lagging behind prior year,

The capital expansion currently being undertaken will see improved capacity and performance in the preform and closure sections of the business and the company believes it will recover some if not all of the lost ground by year end.

Carnaud Metalbox is currently running approximately 10 percent ahead of the same period last year.

This is as a result of g sales of both HDPE bottles and closures.

He said the company saw improved demand for crowns, which was driven by the seasonal promotions by bottlers. Demand for food can sales was better than previous years.

Source : The Herald

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