THE manufacturer of expanded and extruded polystyrene packaging Versapak Zimbabwe says requires $600 000 for refurbishments and to replace its antiquated equipment, a company official has said.
Speaking during a familiarisation tour of the plastic industry by Members of Parliament in the Industry and Commerce portfolio committee recently, Versapak Zimbabwe managing director Andrew John said the company required to upgrade its equipment and some of it was over 10 years old due lack of long-term lines of credit and high interest rates.
“Capital rates for funding are not sustainable and to get any form of new equipment we have to look for lines of credit and the lines of credit from government is only available for short-term,” John said.
Versapak Zimbabwe operations director Range Dadirai said the company required a total of $600 000 for refurbishment and the exercise would take place in the next two years.
“We require $600 000 to recapitalise just to replace some of the antiquated equipment,” Dadirai said.
Dadirai said Versapak was the only company which manufactures foam trays (kaylit) in Zimbabwe and was facing stiff competition from imports.
He said the company was currently operating at 65% capacity utilisation and exports between 25 to 30% of the total volumes manufactured.
Dadirai said the company had 75% market share, with 15% being provided by the Chinese and 10% were imports coming through various channels into the country.
However, annual turnover was $7,3 million for the year ended December 2013.
“In the first quarter we have been struggling and we made a loss in March as well as April due to liquidity challenges in the market,” Dadirai said.
The company provides packaging material for OK Zimbabwe, Lyons and Dairibord Zimbabwe, among many others.