Proplastics sales performance for the 4 months to April is ahead of last year as volumes grew 49 percent while revenue went up 86 percent.
Chief executive Kudakwashe Chigiya told a shareholders’ meeting that outstanding orders from 2017, coupled with strong consumer demand in the first quarter resulted in the company starting the year 2018 on a positive note.
“The Group is on course to report an above average performance on revenue and profitability at half year and this can be achieved as profitability for the 4 months is already 2.5 times higher than the full 6 months 2017,” he said.
Chigiya said sales performance was matched by a solid plant performance and this resulted in healthy gross profit margins which were 150 percent above prior year.
However, company continues to face challenges relating to the availability of foreign currency as allocations dried up in mid-January.
As a result, the company experienced product supply gaps caused by inconsistencies in importation of raw materials.
Currently, the company has approximately one and half months cover on raw material stocks.
Chigiya said construction at the new 5200m² factory, which began in November last year, is behind schedule.
“We expect to be back on schedule within the next few weeks. The major challenge, as was expected, has been the ability to secure the requisite foreign currency for the imported components of the project,” he said.
He said the company has already identified a supplier for a state-of-the-art automated mixing plant from Italy and, through their bankers, is currently processing the required deposit.
“We expect to have completed the factory construction by the end of October and migration from the old factory is targeted for end of the year and should be completed in Q1 2019,” he said.
Going forward, Chigiya said demand is expected to be driven by key sectors such as agriculture, local authorities, mining and housing development which will be the Group’s areas of focus. –The Source