Almot Maqolo, Staff Writer 
PIPING products manufacturer Proplastics says it secured a US$4 million contract in Malawi as the group continues to widen its export market.
The group said it has identified two new export markets in the region that are expected to improve foreign currency revenue streams.
In a recent interview, the chief executive of Proplastics, Kuda Chigiya, told The Financial Gazette the firm has been perennially servicing only Zambia and Mozambique.
“We have not been exporting to Tanzania, you must remember that Tanzania is 2 600 kilometres from Zimbabwe. We are in Tanzania right now. We have also opened up in Malawi, we are busy in Malawi as we speak and we have a good contract there worth about US$4 million that we are running with,” he said.
Chigiya said Proplastics’ expansion drive has not been spared the economic headwinds being experienced locally.
“In terms of expansion, we have done some feasibility studies looking at diversification, you know, opening a trading branch or factory,” he said.
“We have identified two countries, precisely Botswana and Zambia, but at the moment, with the economic volatility that is happening in Zimbabwe, we are holding on to working capital so that we can fund and protect the current operations that we have.”
For capital expenditure for the remainder of the year, the firm is looking at just under US$1 million.
This comes as the company has already invested in a new factory and utilisation is about 56 percent.
Sales volumes for the five months increased by 14 percent compared to the same period last year, while sales revenue also went up by four percent compared to the same period last year.
Export sales grew by 77 percent compared to the prior year. The overall contribution to total sales was 15 percent, compared to 9 percent for the same period last year.
The target for exports remains at 10 to 15 percent of total sales.
Chigiya indicated that the business has more than two months’ worth of essential raw materials on hand.
The market continues to indicate a preference for US dollars as a method of settlement over the local currency. The company’s revenues remain heavily skewed towards the US dollar at a ratio of 70:30 to ZWL.
On a monthly basis, the company requires
US$2 million for raw materials. The firm sometimes took part in the foreign exchange auction, with allocations totalling US$1,1 million thus far and US$820 000 being paid out.
On the other hand, Proplastics lost an average of 28 days of production due to power cuts and faults. In monetary terms, that is between US$2,5 million and US$3 million.
As a result, production volumes for the five months to May 31, 2023 dropped by 17,5 percent below prior levels.
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