DELTA Corporation, Zimbabwe’s leading brewer and beverage manufacturer, is set to import raw materials to bolster its stocks as the ongoing El Nino-induced drought has adversely affected its contract farming scheme.
The company heavily relies on agricultural crops like sorghum for its beer and soft drink production.
Delta typically requires 11 400 tonnes of red sorghum and 2 400 tonnes of white sorghum annually, but these figures fluctuate depending on projected domestic beer consumption.
While Delta’s barley contracts remain relatively stable, the drought has significantly impacted the sorghum harvest.
“Sorghum this season was not good,” admitted Delta’s finance director, Alex Makamure.
“We will look at supplementing that, maybe with imports. But going forward, our contract scheme is the backbone of our supply chain.”
The sorghum contract scheme plays a vital role in integrating marginalised communities into value chains and promoting the cultivation of drought-resistant crops.
Despite the current setback, Delta remains committed to this initiative for future sustainability.
In the meantime, Delta’s sales channels, primarily bottle stores, wholesalers, restaurants, and hotels, continue to operate predominantly in US dollars following the suspension of the Zimbabwean dollar and the introduction of the new Zimbabwe Gold (ZiG) currency.
The transition to ZiG has caused some disruptions as financial institutions adapt their systems.
Delta has invested nearly US$100 million over the past two years in expanding its production capacity, including new packaging lines and Chibuku Super plants.
This investment demonstrates the company’s commitment to meeting the growing demand for its products despite the current challenges posed by the drought.
While the drought necessitates temporary imports, Delta’s focus remains on supporting its contract farming scheme and ensuring a sustainable supply chain for the future.
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