Delta Beverages invests US$100m in capacity expansion

LISTED beverages producer, Delta Beverage, invested more than US$100 million in 2023 to expand its capacity and to improve customer service, which has seen the company commissioning different plants, which include packaging and cooling facilities.

This comes as the firm reported a significant revenue increase of US$767 871 for the fiscal year ending on 31 March 2024, up from the US$536 923 earned in the previous year.

Profit after tax nearly doubled to US100,538 from US63,143.

In the period under review, the Lager beer business recorded a historic volume of 2,46 million hectolitres for the year, a growth of 13 percent compared to prior year.

In a statement accompanying audited financial results for the year ended 31 March, Delta Beverages chairman, Mr Sternford Moyo, said the group commissioned significant production capacity expansion projects during the year to support volume growth and to improve customer service.

He said the company is also increasing investments in its brands through marketing, promotional and sponsorship activities.

Some of the projects commissioned by Delta during the year under review include the lager beer glass packaging line at Southerton Brewery, a PET packaging line at Graniteside, the Chibuku Super plant at Harare Brewery and a Chibuku Super plant at Phelindaba Brewery in Pretoria.

“African Distillers (Afdis) commissioned a new PET line, refrigeration equipment and a bottle washer whilst Schweppes Zimbabwe installed a high-capacity PET line, among other key projects.

“These investments are complemented by the injection of glass bottles, coolers, informal market equipment, additional distribution fleet and ICT equipment. The cumulative investment over the last 24 months is indicated at about US$100 million,” said Mr Moyo.

He said the business will benefit from the improved product supply following the commissioning of additional production capacity during the past year and improved operational efficiencies across the business segments.

“The focus remains on exploiting opportunities from activities that generate aggregate demand,” he said.

Mr Moyo said consumer spending remained resilient across the territories and offers growth opportunities.

In the period under review, the listed entity reported revenue of US$768 million, operating income amounted to US$152 million, reflecting a 53 percent growth over the prior year.

The lager beer business recorded a historic volume of 2,46 million hectolitres for the year, a growth of 13 percent compared to prior year.

There are ongoing efforts to close the supply gaps for certain brands and packs arising from bottlenecks in the supply of packaging materials from traditional sources.

Demand for Carling Black Label continues to grow with the brand surpassing one million hectolitres during the year.

The total sorghum beer volume for Zimbabwe, including exports, grew by three percent over prior year, off a high prior year base. The volume sold in the domestic market was flat compared to prior year.

The traditional beer category was significantly affected by the disruptions to the route to market varied account management practices by retail and wholesale partners in a market with improved availability of lager beer and other forms of alcohol.

The Sparkling beverages volume for the year at over two million hectolitres was 29 percent above prior year.

The growth was spurred by the improved supply of PET packs and flavours following the commissioning of a new packaging line at Graniteside, Harare in June 2023, which has allowed for keener pricing.

African Distillers (Afdis) recorded a marginal volume growth of one percent over prior year as overall demand was negatively impacted by price distortions in the face of cheaper imports and increased availability of illicit products on the market.

The Ready to Drink (“RTD”) segment comprising ciders, grew by five percent, benefitting from improved product availability and brand activations.

The Spirits category decreased by two percent due to increased competition from cheaper and illicit offerings. Wine performance remained at par with prior year.

Schweppes Holdings Africa Volume at Schweppes was 11 percent above prior year as the sector had to effect very high price increases in response to the sugar surtax. —chronicle