Delta’s interim results released last week showed that the company had performed ahead of analysts forecast buoyed by an increase in volume spurred on by increased demand.
Volume for all its beverages went up 23% to 3,427 million hectolitres in the six months ended September 30 2011 from the year comparable. Delta group CEO Joe Mutizwa told analysts, the beverages manufacturer aims to reach seven million hectolitres in the full year 2012. Delta has an installed packaging capacity of nine million hectolitres.
Delta’s chief operating officer Pearson Gowero told analysts on Wednesday the company had recorded a strong market share across all beverages. He said there is growth in volume evenly spread across the country even in Bulawayo where there seems to be gloom and doom.
A number of companies in Bulawayo have shut down owing to constraints and Cabinet recently approved a US$40 million fund to resuscitate companies in the city that was once the country’s industrial hub.
Gowero said the soft drink performance was held back by inadequate 300ml returnable glass bottle supply and unusually cold weather in August and September. Such is the demand for soft drinks that Delta has installed a new 600 000 hectolitres per annum bottling line at Graniteside in Harare.
Gowero said there is a shift in volume contribution, where soft drinks and lagers recorded marginal increase in its contribution to total volume. In the six months to September last year, sorghum beer contributed 56% to total volume with soft drinks and lagers contributing 18% and 26% respectively.
In the six months to September 2011, sorghum’s contribution dropped to 53% whereas soft drinks and lagers recorded marginal increases to 19% and 28% respectively.
Gowero said there is now a changing mix in value with premium beer contributing 13% of the total volume in the first half of the financial year from 11,2% last year.
For sparkling beverages, convenience pack which include the cans and plastic bottles contributed 28% of total volume up from 16,4% last year. Returnable glass bottles contribution dropped to 72% from 83,6% last year.
Delta said the launch of the 660ml magnum returnable glass bottles was received well in the market with consumer acceptance exceeding forecast (3,5% contribution in September versus 1,2% forecast). The 660mls are for pilsener, Zambezi and bohlingers.
In his update on the supply chain, Gowero said, Delta had received 20 000 tonnes of barley. The company requires around 25 000 tonnes. He said maize supply is secure as South Africa, Zambia and Malawi recorded surpluses.
The sorghum supplies, Gowero said, would take Delta to the next harvest. Gowero said Delta is importing sugar though there are efforts to source the commodity locally. He said no change is anticipated in the short term and prices are likely to reflect the volatility of global markets.