The Sunday Mail
Livingstone Marufu —
Delta Corporation, the country’s biggest beverages maker, is set to commission its US$30 million Chibuku Super plants in Masvingo and Kwekwe this week, just in time for the festive season where demand is traditionally high.
While lager and sparkling beverage volumes have been declining, sorghum beer has been bucking the trend. Softening demand has led to a shift from premium priced lager to relatively cheaper opaque beer.
Delta has invested US$14 million and US$15 million on Chibuku Super plants in Masvingo and Kwekwe respectively. Company secretary and group treasurer Mr Alex Makamure told The Sunday Mail Business that the two plants, which were due to be commissioned in October, were running behind schedule because of delayed shipment of equipment caused by bottlenecks in remitting foreign payments.
“The Masvingo and Kwekwe breweries have resumed production of the standard Chibuku in the popular Scud pack. We expect to commence producing Chibuku Super during the last week of November 2016 into the first week of December.
“We expect both breweries to contribute meaningfully to the supply of product during the December ‘peak period’,” said Mr Makamure.
Continued investment in Chibuku Super plants has allowed the brand to leapfrog Chibuku Scud as consumers’ preferred opaque beer. Chibuku Super, introduced on the local market in 2014, now accounts for 60 percent of opaque beer volumes at two million hectolitres yearly.
Delta believes that the price of a 1,25-litre Chibuku Super bottle at US$1 can be reduced further if agricultural value chains improve, particularly as regards output and pricing of maize.
To maximise the benefit to Zimbabwe’s economy, the new Masvingo and Kwekwe plants are outsourcing many services to local companies. Notwithstanding the high volumes that are pushed by opaque beer, clear beer still remains the largest revenue contributor for the group.
In the six-month period ended September 30, 2016, lager volumes fell 11 percent while sparkling beverages were down three percent as sorghum beer volumes climbed six percent.
Said Mr Makamure: “We have experienced a decline in the volume of clear beer in the last couple of years and some relative shift to opaque beer.
“Clear beer remains the biggest contributor to group revenue. Our interim financial results show that lagers contributed US$92,8 million compared to US$83,4 million for sorghum beer for the six months to September 2016.
“As explained in our previous commentaries, consumers will shift between categories in search of value. Most of our consumers remain loyal to their brands across the spectrum of beverages.”
Delta has been investing about US$50 million per year in new plants, plant upgrades, logistics and ancillaries since 2009. For the half-year ending September 30, 2016, the company’s revenues declined by eight percent to US$246,6 million compared to the same period last year.
Operating income slumped nine percent to US$39,4million and earnings before interest, tax depreciation and armortisation (Ebitda) were eight percent lower at US$54,9 million.
The last quarter of the year, which has the Unity Day, Christmas and New Year holidays, is usually characterised by relatively stronger consumer demand.
