Drought drives demand for Proplastics irrigation pipes
Demand for irrigation pipes, including related fittings, borehole casing, and newly introduced tanks, is projected to improve driven by drought mitigation-related projects, says Proplastics.
Listed on the Zimbabwe Stock Exchange (ZSE), the company is a leading plastic pipe manufacturer, specialising in the manufacturing of polyvinyl chloride (PVC), high-density polyethylene (HDPE), low-density polyethylene (LDPE) pipes, and related fittings.
The pipes are manufactured for various applications in irrigation, water and sewer reticulation, mining, telecommunications, and building construction.
In the three months to March 31, 2024, the company’s sales volumes retreated 16 percent compared to the same period last year, resulting in revenue weakening 24 percent compared to the previous year’s revenue of US$5,448 million.
“The business recorded a break even position in profitability for the quarter. The revenue inflow was predominantly in United States dollars,” said group chairman Mr Gregory Serbon in a trading update.
During the quarter under review, production volumes grew by 8 percent compared to the previous period, thereby closing on backorders and re-stocking fast-moving products.
Mr Serbon said the raw material supply was consistent throughout the quarter. He said local currency transactions, mainly from public-related institutions, are likely to improve following the introduction of ZiG as the local currency.
“Overall, we expect an improved performance in the second quarter of the year,” said Mr Serbon.
He added that raw material pricing is anticipated to remain stable during the year from a pricing point of view as well as availability. Mr Serbon said materials for the new solar plant have now been delivered to the site, and work has commenced.
He said the project was expected to be commissioned by the end of July 2024, and the factory has enough capacity to convert all orders on time.
Proplastics has over the years invested in capacity through initiatives that include the construction of a new factory at its Ardbennie premises. The company also commissioned a new PVC machine for US$1,3 million and new moulds have seen improvements in both production efficiencies and production volumes.
-herald
