PIPING products manufacturer, Proplastics, says its new investment of a 500mm production plant contributed 47 percent to total revenue during the half year ended June 30, 2023.
The new production line, which has increased’ production capacity, manufacturers large bore PVC diameter pipes.
The facility is expected to improve production capacity to 15 000 tonnes per annum and the new set-up will allow Proplastics to meet domestic demand as well as exports into the Sadc region.
Proplastics’ chairperson, Gregory Sebborn, said the increased production capacity is expected to continue to improve.
“Overall, we expect a stronger performance in the second half of the year,” Sebborn said in a statement accompanying results.
He said the group anticipates an improvement in performance in the second half of 2023, underpinned by strong demand and a consistent supply of raw materials.
“Although we expect the operating environment to remain challenging, we expect the future to be clearer with the 2023 elections having been concluded,” Sebborn said.
“The environment is showing that customers are preferring to settle transactions in US dollars, and we expect this trend to largely continue into the second half of the year.”
He said the supply and pricing of raw materials is expected to remain stable on the global market and this should help in augmenting demand for Proplastics’ products.
As a result of the ongoing and significant load shedding experienced over the past year, Proplastics approved the installation of a substantial solar generation plant to augment the availability of power and to minimise operational downtime and reduce production costs.
Sebborn said the project will be implemented over the next six months and should improve the group’s carbon footprint.
During the first half of the year, the company’s turnover surged 23 percent to US$10,5 million from US$8,5 million in the comparative period, largely due to a 19 percent increase in sales volumes.
As a result of the group’s success in securing substantial supply contracts in the region, exports made up about 15 percent of total sales. The firm has been perennially servicing only Zambia and Mozambique.
“Increasing export performance will remain a key focus area for the group,” Sebborn said.
Proplastics returned to profitability in the first half of 2023, reporting a US$561,000 profit after tax from a loss of US$723,000 in the comparative period on the back of an improved top line.
The group’s cost containment measures paid off as overheads declined by 13 percent from the prior period.
Total assets stood at US$27 million while Proplastics’ current ratio closed the period at 1,28.
The company proposed a dividend of US$0,11 per share.