eBusiness Weekly
Business Writer
Proplastics says it has secured sufficient raw materials to ensure stock availability in the market, underpinned by the free finances created.
In October last year, the government stated that it would maintain its multi-currency system, anchored by the US dollar, until 2030.
The multi-currency regime was supposed to end in 2025.
However, due to the uncertainty this has caused, several institutions were unwilling to grant loans after 2025.
Regardless of the operating environment, the piping products manufacturer posted defensive financial results.
“The business benefited from the foreign auction system in the first half of the year. However, this slowed down in the third quarter owing to inaccessibility of Zimbabwe Dollar inflows combined with the increase of the internally generated USD sales,” group chairperson Gregory Sebborn said in a trading update for the 9 months to September 2023.
“The market continued with the desire to settle transactions in USD as opposed to the use of local currency. Currently, the business is transacting at 90 percent in USD and 10 percent in local currency.”
“Raw material supply was stable throughout the period and at the end of September.”
Sebborn said the business held significant stocks of PVC resin to ensure uninterrupted supply to the market.
“The pricing of resin continued to be more stable compared to the same period last year and post the Covid-19 pandemic and later the Russia-Ukraine conflict.”
In the period, sales volumes rose 24 percent to 4,987 tonnes as Proplastics topline surged by 5 percent to US$16,1million.
“Though volumes increased, there was a general slowdown between the month of July and September, which is traditionally our peak period,” he said.
As for company projects, Proplastic’s plastic tank manufacturing project was successfully commissioned during the period under review and products are now available in the group’s branches.
“Preparations for the work on the solar project to power the plant are underway and are set to be completed within the quarter to pave way for the actual installation. This project will be implemented over the next six months and will mitigate against current power outages as well as improve the carbon footprint of the Group,” Sebbon added.
Exports saw a notable increase, accounting for 13 percent of overall sales. “Active markets were Malawi contributing 70 percent, Congo at 15 percent and Zambia 15 percent.”
The current ratio stood at 1:1.37 from the December 2022 position of 1:1.11.
The status of external creditors has also improved, with a 25 percent decline in total creditors since the end of December 2022.
“The business remains profitable, although operating at subdued levels,” he said.
In his outlook, he said; “We anticipate modest demand for products across all market segments on the domestic market.”
