Online Reporter
Nelson Gahadza, Zimpapers Business Hub
NAMPAK Zimbabwe says volumes across its business units are expected to improve in the last quarter of the year, driven by stronger seasonal demand in the beverages sector and increased agricultural output.
This comes as group volumes for the third quarter ended June 30, 2025 (FY2025), were 3 percent behind the prior year comparative period, mainly due to weaker demand and increased competitor activity for (Polyethylene terephthalate) PET/preforms and commercial cartons.
“Metal volumes were also significantly down on prior year volumes in the quarter due to reduced demand and product rationalisation to align with market demand and achieve improved efficiencies,” group managing director Mr John Van Gend said in a trading update.
He said volumes for the nine months to June 2025 were 13 percent below the prior period due to volume recoveries in the current quarter, which made up for some of the volume loss in the previous periods.
Resultantly, group revenue for the nine months to June 2025 was 12 percent below the comparative period.
“This has been due to volume losses in the plastics segment, as well as the commercial cartons, where self-manufacture has impacted current period volumes. Lower tobacco carryover volumes at the start of the FY25 season due to the El Niño effects in the FY24 season impacted volumes in the current period,” said Mr Van Gend.
In terms of segmental performance, at Hunyani Paper and Packaging, sales volumes at the Hunyani Corrugated Division for the third quarter were in line with the prior year.
Mr Van Gend said sales volumes in the tobacco sector were marginally behind the same period last year due to the slow start to the tobacco season deliveries.
“Demand is expected to remain strong as we approach peak season on the back of a larger tobacco crop this season.
“Commercial carton volumes in the quarter under review were 3 percent ahead of the prior year, driven by increased demand in the horticultural sector,” he said.
During the period under review, the cartons, labels and sacks division sales volumes for the third quarter were 34 percent ahead of the prior year due to improved demand for tobacco paper wrap. Commercial packaging was 17 percent ahead of the prior year due to volume recovery.
In the plastics and metals segment, Mega Pak, third-quarter sales volumes were 14 percent down on the prior year after volumes were negatively affected by increased competition pressures, as well as higher plant breakdowns due to severe power cuts in Ruwa.
“This negatively impacted our ability to meet customer demand. The use of generators has mitigated the impact of the power cuts, albeit at higher operating costs. Management is actively monitoring this while exploring cheaper alternatives for improved power supply,” said Mr Van Gend.
At CarnaudMetalbox, sales volumes were 8 percent ahead of the prior year; however, metal volumes were significantly below prior year volumes due to market-driven product rationalisation, as well as the impact of the late arrival of raw material at the end of the second quarter.
“HDPE volumes were 47 percent ahead of the prior year and benefitted from strong demand in the quarter under review,” said Mr Van Gend.
Looking ahead, he said the paper operation was expected to benefit from the increased volumes from the record-breaking tobacco marketing season.
He added that volume recoveries were also expected in the plastics and metals operations as pricing distortions reduce on the back of a stable exchange rate.
However, the group continues to trade under a cautionary notice regarding the concluded sale and purchase agreement between Nampak Southern Africa Holdings Limited and TSL Limited, which agreement remains subject to various suspensive conditions.
