By KUDZAI KUWAZA
LISTED diversified packaging manufacturer, Nampak Zimbabwe Limited recorded a decline in volumes at its subsidiaries as a result of reduced consumer demand and a decline in regional exports among other challenges.
In the company’s financial results for the year ended September 30, 2020, Nampak Zimbabwe group managing director John van Gend said the overall demand for packaging remained subdued this year, compared to previous years.
“Nampak has not been immune to the social and economic impact of the COVID-19 pandemic and the resulting effects on the Zimbabwe economy over the past year,” he said.
Van Gend revealed that the volumes for the full year for its Hunyani subsidiary declined by 28% compared to the previous year.
“The Hunyani Corrugated Division decline was driven by the tobacco case market where the local tobacco crop output was significantly down on the prior year and the delayed start of this year’s tobacco market season due to COVID-19 concerns. There was also a decline in regional exports. The cartons, labels and sacks division remained profitable despite stiff competition and reduced volumes,” he said.
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Nampak’s subsidiary Mega Pak, Van Gend said, recorded a 12% drop in full year volumes compared to the prior year due to constrained consumer demand in the preforms market in the first half of the year.
“However, local demand increased in the final quarter of the year. Regional export demand was depressed, especially in the Democratic Republic of Congo,” he said.
Van Gend revealed that the volumes for the full year for Nampak’s subsidiary Carnaud Metalbox plunged by 34% compared to the prior year.
“The shortage of foreign exchange and reduced disposable incomes in the first half of the year negatively impacted demand. There was improved product demand in the final quarter of the year and access to needed foreign exchange improved through the auction system,” Van Gend said.
He said Softex Tissue Products continued to trade profitably as a result of tight cost control and improved product mix.
He added that the company had maintained engagement with relevant authorities to regain effective control of its estates in terms of the Bilateral Investment Protection and Promotion Agreement with South Africa.
“Our intention is to rehabilitate them for timber and agricultural purposes, in support of the current government policy thrust in this direction. We remain hopeful for the restoration of title or long-term leases which will provide the security required for new investment and job creation,” he said.
The company’s directors decided not to declare a dividend as the available cash resources are expected to fund future capital expenditure projects and meet working capital requirements.