BEVERAGE maker Schweppes Zimbabwe Limited’s year-end voulumes declined compared to the prior year due to softening demand on the back of a weakening economy, a company official has said.
Report by Victoria Mtomba
In an interview, SZL managing director Charles Msipa said 2013 had been a difficult year for the country as a whole. Treasury revised the growth projections to 3,4% while manufacturing sector capacity utilisation levels went down to 39,6% from 44% in 2012.
Msipa said he could not give NewsDay the figures as they were a private limited company.
“We will close the year below 2012 performance because during the second half of the year we witnessed a slow down or near collapse in demand due to the tight liquidity conditions in the economy,” he said.
Msipa said production was not really an issue for the beverage and cordial producer adding that the company is operating at 60% capacity utilisation levels.
“We are reducing the price of some of our products to stimulate greater packages. We reduced the price of our products to enable customers to buy as we realised that the liquidity crisis is affecting the movement of stocks, ”he said.
As part of strengthening the business Msipa said SZL is finalising plans to expand its exports markets.
“We are rebuilding the export market, we are currently exporting to Mozambique and Zambia so we are looking at Zambia, Mozambique and Angola. We are finalising the process to exports in the region,” he said.
Msipa, however, could not disclose the budget for the expansion plans.
The manufacturing sector is facing challenges that include lack of affordable working capital, unavailability of economic enablers such as electricity and antiquated machinery.
Since 2009 the capacity utilisation levels for the sector has been trending upwards, it rose to 30% from 10% in 2008 before rising to 43,7% in 2010 and 57,2% in 2011.
The year 2013 has been the worst for the country in terms of performance of the economy as a whole since the introduction of the multicurrency in 2009.
During this year, revenues to treasury were reduced due to decline in taxes as companies closed due to viability problems. According to a report by the National Social Security Authority 700 companies have so far close shop.