PROPLASTICS says its tank manufacturing business, which started at the end of last year through dry testing, is now contributing positively to volume performance.
It is part of the company’s drought mitigation-related projects.
The country is currently facing its worst drought in years, leading to increased investment in drought mitigation efforts such as irrigation projects and borehole drilling.
“So officially, we started manufacturing these plastic tanks in January this year, and to date, they have contributed about five percent (of total volumes),” Proplastics chief executive officer Kuda Chigiya said.
“We still continue to make gains in the market in terms of our product offering to supply the markets with the drought mitigation measures. I am so happy that the private-public partnership has come in handy.”
Chigiya indicated that the raw material supply has been very stable in the first five months of 2024.
“We had turbulence before post-Covid-19, and now the Russia-Ukraine war is continuing, but trading in the international and national markets is not affecting us,” he further said.
“Lately, we had some challenges on the Gaza Strip; we have had some disturbances in terms of container movement and container availability, and that has now caused the price to go up, but the raw material price itself has remained stable for the past one and a half years.”
The country’s largest piping product manufacturer started the year on a slow note, mainly due to liquidity constraints coupled with the El-Nino induced drought.
Production volumes plunged by four percent owing to lower sales orders.
Proplastics is deliberately slowing down on exports as unsustainable electricity costs have rendered the group’s products uncompetitive in regional markets.
For many years, the relatively higher price of electricity has been a major source of discomfort for businesses operating in the country when compared to power tariffs elsewhere.
However, despite numerous engagements between business and authorities, a long-term solution has proven to be elusive.
As a result, the company’s exports retreated by 96 percent in the first five months of 2024.
The firm bemoaned the Reserve Bank of Zimbabwe’s surrender requirement portion, which is constraining the company’s operations.
Exporting companies are required to liquidate 25 percent of earnings to the central bank which is then converted and entered into the companies’ local currency accounts.
The RBZ governor, John Mushayavanhu, however, recently told a miners’ conference that the export earnings surrender requirement is “here to stay” as an avenue to generate hard currency to settle the country’s various external obligations.
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