President Emmerson Mnangagwa has encouraged Delta Corporation Limited to explore the export market and also consider investing into the regional market to help secure foreign currency for the country.
Speaking during a tour of one of the company’s plants in Harare yesterday, Mnangagwa urged the blue chip beverages firm to play its part in jump-starting the economy by venturing into the export market.
This came as the company announced plans to spend $250 million on a recapitalisation programme over the next five years.
The capital will be split into $50 million injections annually for Delta’s operations in Harare, Bulawayo, Rusape, Masvingo and Kwekwe during the five-year period.
“I am impressed that since 2013, you have not increased prices of products. That is commendable. Furthermore, this will enhance the company’s competitiveness in the regional markets and boost export earnings. But I am informed that currently, Delta’s market is principally the domestic market. I would urge that as we go into the future, you either export or invest in regional markets so that you earn foreign currency for us by investing outside Zimbabwe,” Mnangagwa said.
“In this regard, my government is determined to play its facilitation role by continuously creating an enabling environment for business to thrive, create wealth and maximise stakeholders’ business goals, in our case, to become a middle income economy by 2030.”
Delta’s capital injection comes on top of the $500 million the company has spent in modernising its plants since 2009.
Part of the modernisation to date includes the installation of three state-of-the-art returnable glass packaging lines and four Chibuku Super plants, while its sparkling beverages section benefited from two PET plants.
Delta also invested in one returnable glass line and one maheu plant.
Government’s interest in Delta comes as the company paid $141 million in taxes in their financial year ending March 31, 2018 and attracts considerable interest from foreign investors on the Zimbabwean Stock Exchange.
Delta Corporation Limited chairperson Canaan Dube said the company’s fortunes had improved since the coming in of the new dispensation in November 2017 due to the policies of the government, leading to a declaration of dividends twice.
However, he added that while this was good, it placed more need for forex to import raw materials.
“Your Excellency (Mnangagwa), since the ushering in of the new dispensation, as I have said before, our top line performance has grown. Unfortunately, that places a demand for our imported raw materials and services, which are limited by the challenges of increasing or accessing foreign currency,” he said.
Dube thanked the Reserve Bank of Zimbabwe for the assistance they had received in importing raw materials thus far and asked for Treasury to consider reducing excise duty on beer in the future.
“This will unlock additional volumes and support our planned investment in additional capacity,” Dube said.
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