Online Reporter
Tapiwanashe Mangwiro
Plastic piping manufacturer Proplastics plans to significantly increase capital investment next year after posting improved financial results for the year ended December 2025.
The company intends to more than double its capital expenditure to US$2,41 million in 2026, from US$809 000 invested in 2025, to expand production capacity and improve operational efficiencies.
Chairman Mr Greg Sebborn said the investment programme will be financed through internal resources and existing credit facilities, signalling confidence in the company’s financial position and growth prospects.
“The capital commitment follows a year in which the group reported turnover of US$22,8 million, an 11 percent increase from the previous year, supported largely by rising demand across domestic markets.
“Sales volumes grew 9 percent during the period, reflecting sustained activity in sectors that rely on plastic piping products, particularly construction and infrastructure development,” he said.
Despite the improvement in sales, export earnings remained limited, contributing only 2,7 percent of total turnover.
The company said regional competitiveness remains constrained by the country’s foreign currency surrender policy, which reduces the amount of foreign exchange exporters can retain.
While revenue growth was modest, Proplastics delivered stronger improvements in profitability after focusing on cost management and production efficiency.
Gross profit rose 23 percent to US$7,49 million, helping lift profit before tax by 21 percent to US$1,99 million.
Net earnings also improved, with profit after tax reaching US$1,39 million for the year.
Mr Sebborn said disciplined management of operating costs and careful control of financing expenses helped support the improved performance.
“Prudent management of gearing and finance costs supported the cash position,” he said.
The group closed the year with US$366 000 in cash and cash equivalents, while maintaining relatively low debt levels.
The company’s balance sheet also strengthened during the year, with total assets increasing to US$24,7 million.
Liquidity remained healthy, reflected in a current ratio of 2.07:1, suggesting the business retains comfortable short-term financial capacity.
Mr Sebborn said the conservative balance sheet structure provides the group with flexibility to fund working capital requirements and planned capital projects as demand grows.
Low levels of gearing also leave room for additional borrowing if required in the future.
Looking ahead, Proplastics expects broad-based growth across its key product segments, supported by improving economic conditions and increased infrastructure investment.
Plastic piping products are widely used in water reticulation, irrigation, housing and civil engineering projects, making them sensitive to construction and infrastructure cycles.
Mr Sebborn said the company believes national infrastructure spending will continue to support demand for its products in the coming year.
At the same time, the local market is evolving as purchasing power becomes more decentralised and customer demand increasingly fragmented.
This shift, the company said, requires more targeted market positioning and improved operational efficiency.
Proplastics believes investments in production capacity and technology will help it respond to these changes while strengthening its competitive position.
“The group’s products continue to serve as critical inputs across the sectors it has traditionally supported,” Mr Sebborn said.
Despite the positive outlook, the company warned that global geopolitical tensions could disrupt supply chains for key raw materials.
The recent escalation of conflict in the Middle East has already raised concerns about potential shortages, shipping delays and price increases for petrochemical-based inputs used in plastic manufacturing.
Proplastics said it has secured adequate raw material supplies in the short term but is closely monitoring the situation while working with suppliers on contingency plans.
Rising global energy costs are also expected to place additional pressure on production costs.
Energy price increases often ripple through supply chains, raising transportation and manufacturing expenses and potentially squeezing margins.
Reflecting the improved performance, the board has proposed a final dividend of US$0.20 cents per share for the year.
With infrastructure investment rising and capacity upgrades planned, Proplastics appears to be positioning itself for stronger growth in the years ahead.
