Delta Corporation, Zimbabwe’s largest beverage marker, has dumped three suppliers — ZimGlass, Natprint and Starafricacorporation — and turned to imports after the three companies allegedly failed to sustain the flow of raw materials as demand soared in step with the procurer’s scheduled growth in beverage volumes.
Delta aims to ramp up to 7,3 million hectolitres by 2013 from about 5,3 hectolitres this year.
ZimGlass supplied nearly 11 000 tonnes of bottles for packaging every year through Headend, while Natprint and Starafrica produced labels and bottler-grade sugar for the conglomerate, respectively.
Starafrica, which supplied bottler-grade sugar for Delta’s brewery and soft drink manufacturing divisions, was the first to lose, allegedly because of price, supply limitations and quality issues.
Although Starafrica has denied losing the contract, Delta Beverages said it last bought soft-drink bottler-grade sugar from the conglomerate in 2008 and has since then procured the sweeteners from South Africa through a formally- tendered contract.
In July, Delta first ran a second bottler-grade sugar supplier tender in South African newspapers.
Natprint, a division of Zimbabwe Stock Exchange-listed Zimbabwe Newspapers (Pvt) Limited, has also lost out allegedly following sustained poor lead times in the supply of labels for Delta’s brewery and soft drink units.
Zimbabwe Newspapers chief executive officer Justin Mutasa was not available for comment Sunday.
In an interview conducted prior to Delta’s closed period, chief executive officer Joe Mutizwa confirmed the beverage maker’s deal with ZimGlass had collapsed after the Kwekwe-based company failed to raise $21 million for the refurbishment of Headend’s bottle-making furnace.
“The Delta-ZimGlass deal was a four-year deal. It expired in January this year. As a result of power failures, the furnace could not remain operational so we decided to import bottles,” Mtizwa said.
The company has now engaged Egyptian suppliers. Headend, the country’s sole bottle manufacturer, was formed in 2006 as a joint venture between Delta and the Industrial Development Corporation, ZimGlass’ major shareholder.
Early this year, Delta pulled out of Headend and ceded control over the bottle-making furnace to ZimGlass.
A few months later, its bottle procurement contract with the company collapsed after its former associate shut down the furnace, forcing it into imports.
ZimGlass boss Jacob Dube confirmed that the glass-manufacturing firm had disbanded Headend until it secures $3 -$7 million to partially rebuild the furnace, which he said had outlived its lifespan of approximately five years.
“Headend is no more, the furnace has now reached its lifespan and we are working with our bank to secure funding to bring it back to life.
“For safety reasons, it was decommissioned.
“If everything goes well, we should be re-commissioning the furnace in February, 2011,” Dube said.