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Schweppes MD upbeat about future economic prospects

The company was previously owned by Coca Cola Company.

Charles Msipa (CM), the Schweppes MD had a wide ranging interview with Standardbusiness reporter Kudzai Chimhangwa (KC)  and he spoke about how the manufacturer and distributor of cordials, syrups, bottled water, juices and nectars has fared a year after the buyout.
Below are excerpts of the interview.

KC: SZL recently signed a competition compliance agreement with the Competition and Tariff Commission (CTC). What are the implications of this agreement for the consumer?
CM: SZL was the first company in Zimbabwe to enter into a voluntary competition compliance agreement with the CTC in June 2011. 
Competition laws are designed to promote competition in the economy by preventing restrictive and unfair trade practices as well as preventing abuse of dominant and monopoly market situations. Our voluntary compliance agreement demonstrates our commitment to promote a culture of compliance with competition laws within our organisation and promoting efficiency and innovation within our industry.
As a result of this agreement, we will intensify our focus on ensuring that our products meet the highest quality standards and are readily available and affordable to Zimbabwean consumers.

KC:  What would you say in percentage terms is SZL’S market share and how has the strategic partnership with Delta Corporation benefited the company?
CM: This year marks the 55th year in which SZL has been refreshing Zimbabwean consumers — which is a tribute to the strength of an iconic and heritage brand — Mazoe Orange Crush, which enjoys strong consumer preference. Our market share is difficult to consolidate because we are active in different categories, namely cordials, juice, still water and flavoured drinks, each with a different competitive set. We have however recently commissioned an independent retail audit to give us an indication of our market share in each category. This information will only be available from August 2011. Delta Beverages Pvt Ltd is a significant and supportive shareholder in the SZL business with representation on the SZL board of directors, which supervises the business. SZL benefits from Delta Beverages’ deep and broad expertise in the beverage industry in Zimbabwe.

KC: How do the production figures at the company’s plants stand?
CM: Our average capacity utilisation for 2011 is 70% for the Harare plant and 60% for the Bulawayo plant.

KC: Besides the Mazoe product, what other products is the company producing and selling to the market?
CM: In addition to the Mazoe Orange crush  and syrups, we produce other non-carbonated beverages from the Coca-Cola Company, namely; Schweppes still water as well as Ripe n’ Ready flavoured drinks. Additionally, we have recently introduced Minute Maid Juice products in order to provide more beverage choices to Zimbabwean consumers.

KC:  A number of companies in Zimbabwe have lamented the lack of suitable lending-capital from the banking sector to finance retooling operations. Has SZL suffered a similar drawback or if not, how has the company managed to keep afloat and maintain a competitive edge?

CM: Owing to the strength of our brands and our confidence in the Zimbabwe market, we invested US$10 million in a significant production capacity upgrade in 2005. So when dollarisation ushered in a period of recovery and growth in 2009, we had adequate production capacity to meet demand for our products. We have enjoyed positive support from our banking partners and shareholders to enable us to fund the recovery and growth of our business post-dollarisation. We have also managed to secure a combination of local and offshore funding to finance a new production line to be commissioned in early 2012, which is consistent with our philosophy of investing in capacity ahead of demand.

KC: Does the company intend to venture into the export market anytime soon and if so which countries would be targeted?
CM: We currently have limited exports to markets within the southern African region, which will increase when our new production line is commissioned in early 2012.

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