admin
Nelson Gahadza Business Reporter
ZIMBABWE Stock Exchange (ZSE) listed piping products manufacturer, Proplastics Limited, expects demand for its products to improve, driven by strong appetite from public and private-sector-initiated projects.
The ZSE-listed firm manufactures and markets plastic pipes and fittings, specialising in the production of polyvinyl chloride (PVC), high-density polyethylene (HDPE), low-density polyethylene (LDPE) pipes, and related fittings.
The pipes and fittings are manufactured for various applications in irrigation, water and sewer reticulation, mining, telecommunications, and building construction.
Mr Kudakwashe Chigiya, the company’s chief executive, told shareholders at an annual general meeting that transactions are likely to continue being skewed towards the US dollar while raw material availability is likely to remain stable.
“Prices of key raw materials have dropped by more than 50 percent post-Covid and the Russia-Ukraine conflict.
“Key focus will be on value preservation, streamlining operations, and cost containment,” he said while giving a trading update for the five months to May 2023.
During the period under review, sales volume grew by 14 percent compared to the same period last year.
Mr Chigiya said sales revenue also grew by 4 percent compared to the same period last year.
“Revenues continue to be mainly skewed towards USD at 70:30 to Zimdollar,” he said.
He noted that export sales grew by 77 percent compared to the prior year.
Mr Chigiya said the overall contribution to total sales was 15 percent, compared to 9 percent for the same period last year.
He said the target for exports remained at 10–15 percent of total sales.
In terms of operational performance, Mr Chigiya said production volumes dropped by 17,5 percent below the prior year, mainly due to electricity shortages.
“We lost an average of 28 days of production due to power cuts and faults,” he said.
He noted that new factory plant availability stood at 92 percent and utilisation at 56 percent.
“There were adequate supplies of raw materials for the 5 months under review, and the company is adequately stocked with 2+ months of key raw material supplies,” said Mr Chigiya.
He said great efforts have been made to service raw material suppliers to ensure uninterrupted availability throughout the year.
Mr Chigiya said the business has slowed down on capital expenditure, and the focus is on managing working capital and deriving maximum value out of the existing investments.
Online Reporter