ART in US$10m diversification drive
A section of ART’s new paper converting machine at its Kadoma Paper Mills plant. Assembling of the plant started in March with commissioning expected soon.
BY Taurai Mangudhla
ZIMBABWE Stock Exchange (ZSE)-listed manufacturing group Art Corporation (ART) has invested US$10 million into trebling tissue production capacity while improving quality at its Kadoma Paper Mill (KPM) in an effort to diversify the group’s revenue streams.
The investment ushers in a new era for the listed giant where risk is spread across units as compared to the current situation where ART’s battery manufacturing unit Chloride is carrying the group, accounting for 70% of annual revenue.
More related initiatives are expected to be seen across the group in line with its ongoing streamlining initiative that is also meant to secure market dominance.
During a tour of KPM, general manager Mackson Maturura said the company commissioned its first 15 tonne per day tissue machine from Recard, Italy and is currently producing tissue and kraft from recycled waste paper. Average capacity utilisation is at 80%. A second toscotec tissue machine and paper converting line were acquired and installation is in progress.
“The second tissue machine has capacity to produce 30 tonnes per day and will increase throughput from 15 to 45 tonnes per day for both local and export markets. Over and above the volume growth, the new machine will broaden product range, improve process efficiencies, productivity, overall business competitiveness and profitability.
“Product quality rating will increase with improved yield and runnability on tissue converting machines as the new machine has capacity to produce low grammage tissue grades. Virgin tissue products will include serviette, facial and premium bathroom tissue. Recycled tissue grades will include hand towel and bathroom tissue lines”. Maturura said.
In terms of the market, Maturura said Zimbabwe required between 700 and 800 tonnes of tissue paper per month.
“The one we are running here produces about 400 tonnes each month and you can see the gap there, we want to grow the capacity so that we can meet local demand and leave some for export,” he said.
Currently, KPM is running its machine at 90% capacity which is by far higher than the industry average of about 60%.
ART in 2021 shared its aggressive restructuring plan to reposition the quoted conglomerate into a powerhouse across product ranges, with a big say on the foreign currency spinning regional markets.
At the time, chief finance officer Abisai Chingwecha told NewsDay Business that after swooping on tissue products manufacturer, Softex in early 2021, the ZSE-listed giant had added impetus to its African strategy, establishing added capacity in paper production, battery manufacturing and other interests.
Under the plan, the product range at ART’s paper-making business will be broadened to mitigate challenges currently confronting an industry and that is seen as one of the most promising.
The group is focused on beefing up working capital and retooling its detergent manufacturing unit that has struggled to match steep demand, while a high capacity mill will be commissioned at the KPM, giving the business fresh capacity.
He said ART’s retooling programme would see the business being streamlined and all units returning to profit, while loans from discontinued operations would be paid off.
The first phase of the programme involved restoration of profitability across units, while capacity upgrades were rolled out at Chloride.
Further capacity upgrades will be rolled out at Chloride to boost volumes in maintenance free, industrial and solar batteries.
A gel battery manufacturing plant is also on the cards.
At Eversharp, the pen production business, Chingwecha said, the firm was working on its regional presence after capacity upgrade and automation of the factory.-newsday
