Proplastics optimistic despite economic headwinds

31 Jan, 2025 - 00:01 0 Views
Proplastics optimistic despite economic headwinds Finance, Economic Development and Investment Promotion Minister Prof Mthuli Ncube being shown some of state-of-the-art equipment during a tour of Proplastics this week

Oliver Kazunga

LISTED piping products manufacturer, Proplastics Limited, says it has remained resilient despite the prevailing macro-economic headwinds and the firm’s annual turnover has clocked US$25 million currently from US$14 million a decade ago.

The manufacturing concern whose installed capacity is 12 000 tonnes annually, produces products that include PVC pipes, sewer pipes, electrical conduits, borehole casings, soil waste and vent, minetuff pipes, polythene pipes, among others.

At present, Proplastics is producing 7 000 tonnes per annum and supplies the local market as well as the export market, which includes Sierra Leone, Mozambique, Tanzania, Malawi, the Democratic Republic of Congo and Zambia

In the last three years, Proplastics invested US$12 million in constructing a new factory in Harare and the massive infrastructural development projects by the Government across the country have bolstered the firm’s operations.

Under the National Development Strategy 1 (NDS 1) and Vision 2030, the Government has prioritised infrastructure development in sectors that include mining, agriculture, housing and construction, among others.

Briefing Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, during a tour of Proplastic’s factory in Harare on Wednesday, the firm’s chief executive officer Kuda Chigiya said:

“Our turnover has been on an incremental growth for the past 10 years and we are currently a US$25 million business in terms of annual turnover. And not so long ago, in 2013 we were at US$14 million.

“We are also in the export market where we deal extensively — right now we have a contract in Tanzania about 3 600 kilometres from here where we are supplying and we are also in Malawi, Mozambique, Zambia, Sierra Leone and lately we have lucrative contracts that we are trying to wrestle from the South Africans in Eswatini (Swaziland).”

Over the past three years, Proplastics has spent about US$12 million in capital expenditure where a new factory in Harare has been established. In the outlook, Chigiya said his organisation was upbeat of positive prospects underpinned by significant investments in agriculture, the mining industry, construction sector and rehabilitation projects by the Government.

“Going to the future, obviously we are very optimistic — irrigation, we are happy that the rains are here — the dams and rivers are filling therefore we shall see further investments from the farmers and drought mitigation and that’s where our products come in.

“And with climate change, borehole drilling is obviously going to continue. The mining sector, I think it has lots of exploration that’s happening and also water being required for slurry and tailings — rehabilitation projects, we foresee all the municipalities rehabilitating their sewer and water systems, and we see an opportunity in that segment where we replace the material with better PVC pipes that we manufacture,” he said.

“We have also seen new dam developments from the Government’s initiatives — the Gwayi-Shangani Dam, Marovanyati, Kunzvi and once those dams are done, obviously you need your arteries and veins to bring the water to the communities, people in industries and irrigation.”

The firm has also installed a half-megawatt solar power plant as part of efforts to reduce the impact of the existing power supply challenges facing the country.

The solar system is helping Proplastics contribute about 15 percent of its power requirement and this was also going a long way in assisting the company reduce its carbon footprint and operational costs.

As part of its expansion programme, the manufacturing concern intends to set up a plant in the neighbouring Botswana.

“We have started the Botswana initiative where we want to set up a production plant in Botswana. Obviously, we want to leverage on the tariff costs, economic processing zones and all the other benefits they are doing there.

“We are not in any way going to take any one piece of equipment from Zimbabwe to Botswana — this is a completely new initiative that the business is taking through a finance and strategy committee, through the board and stakeholder engagement,” said Chigiya, whose firm employs about 300 people directly and indirectly.

Speaking at the same occasion, Proplastics finance director Paschal Changunda, said his entity, like most of the local manufacturing companies, was faced with a host of challenges that include production costs as utility charges and licence fees for agencies such as the Environmental Management Agency are on the high side.

“In terms of challenges, we have singled out about six challenges — the first one being about the export performance, naturally because we want the exports to grow. This is probably getting into the economy so it becomes an area of focus.

“Its (export performance) hit by our high product costs in terms of competitiveness — you talk of power, it’s very high (the average rate being US$0,23c per kilowatt hour during peak demands.

“So, if we compare with the region, we are three times beyond what is charged elsewhere so that becomes a real challenge,” he said.

Changunda said the 25 percent export retention was also one of the major challenges his organisation as an exporter was facing especially at instances when the exchange rate became unstable.

In his remarks after the tour, Mthuli said it was pleasing to note that the Government’s activities particularly in infrastructural development was supporting growth and development of the private sector with a knock-on impact on job creation and uplifting of the livelihoods of the general populace.

“It’s good to see that the Government’s own work is actually supporting companies, job creation and the economy at large.

“And then going forward, we will continue to improve the environment for doing business . . .  it’s something that we will look into to make sure that we can ease and improve the environment for doing business and then you can expand,” he said.

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