Natbrew on recovery trajectory

National Breweries (Natbrew), a unit of Delta Corporation Zimbabwe, says the continued implementation of the turnaround strategy has seen increased acceptance of the group’s mainstream products, providing opportunities to recover profitable volume.

Based in Zambia, Natbrew produces, packages, and markets traditional sorghum beer products in Zambia.

Popular variants of its opaque beer are Chibuku Shake-Shake and Chibuku Super.

In its financials for the year ended March 31, 2023, the company said the expansion of the distribution footprint and improvement of customer service have had a positive impact on volumes.

“The implementation of the turnaround strategy continued during the second half, which saw the launch of a new product offering, Chibuku Super Banana, and continued expansion of the depot footprint in strategic areas around the country.

“The company also deployed competitive packs to fight competition in the congested trading space of Traditional African Beer,” Simbarashe Banga, the company secretary, said.

He said the volume recovery registered in the second quarter continued in the third and fourth quarters, resulting in the second half volume closing 66 percent above prior and annual volumes closing 28 percent up on the prior year.

“The fourth quarter, however, saw an increased acceptance of mainstream products, providing opportunities to recover profitable volume,” he said.

During the year under review, the company continued to face headwinds arising from the weakening Kwacha, which increased production costs of imported packaging materials.

Banga said the increase in the price of maize was due to opportunistic and speculative pricing due to the maize supply situation in the country.

“The excitement around our diversified product portfolio provides the business with a good base to grow volumes.

“The company is focused on increasing the volume performance of both mainstream and Chibuku Super offerings to deliver value for the business, while the affordable category, targeted at the lower end of the market, will enhance volume and efficiencies,” he said.

He noted that the development of local suppliers for reduced costs and lead times on supplies will be a key lever to improving margins during the second half.

Delta, in a recent update for the first quarter ended June 30, 2023, said it witnessed a 12 percent growth in larger beer volumes compared to the prior year, and the company expects product supply to improve following the recent commissioning of a new bottling line at the end of the quarter under review.

Delta said a new plant, the Chibuku Super Plant, which is expected to improve product supply in the market, will be commissioned during the second quarter of the current financial year.-ebusinessweekly