Beverage company Delta Corporation Limited is constructing a $4 million Maheu plant in Harare that is expected to be complete by September this year.
Speaking at an annual general meeting on Wednesday, chief executive officer Joe Mtizwa said the company is investing in the plant in order to localise production of the newly established maheu brands.
The company is currently importing the beverage from Zambia.
“We are also investing to localise production of the newly established maheu brands. This starch-based non-carbonated and non-alcoholic beverage was, during the year under review, imported from an associate company in Zambia,” chairperson of the company Canaan Dube said.
Mtizwa said volume performances were running ahead of expectation across the board as a result of strong demand.
“This makes the strongest first-quarter volumes since dollarisation coming through in three months from January to March,” said Mtizwa.
“Despite the unusually cold weather, volumes were strong except for soft drinks, which are the most sensitive to the cold spell,” he said.
In a trading update for the first quarter, volumes for maheu were up 182% to 25 000 hectolitres (hls), lager beer volumes were up 28% to 460 000hls.
Soft drinks volumes were up 45% to 333 000hls while sorghum beer recorded a surge of 17%
Mtizwa said a strong drive was under way to localise supply in collaboration with suppliers. To achieve this provided import parity benchmarks are to be met with regard to price quality and reliability of supply.
“We recently signed a contract with Starafrica and Triangle to localise our supplies,” said Mtizwa. He said utilities were a big issue but they were investing to achieve dedicated Zesa Holdings Limited supplies at key production facilities.
Dube said the focus in the year ahead will be on revenue growth through increasing the premium beverage segment contribution and the installation of more capacity in the sparkling beverages business
The company expects to commission a new packaging line at the Graniteside plant by August 2011.
“Installation of the new 42 000 bottles per hour sparkling beverage lines for $13 million at Graniteside plant is expected to commence production next month. And a new beer packaging line planned for the Southerton plant by July or August by 2012 ahead of summer peak demand,” said Dube.
Sales revenues for the quarter ending June 2011 were up 42% to $144 million while earning before tax, interest, taxation, depreciation and ammortisation was $22,7 million. Delta said volumes for its associate company, Schweppes Zimbabwe Limited, for the six months ending June were up 18% as a result of juice shortages.