Staff Writer 
PLASTIC and pipes manufacturer, Proplastics Limited (Proplastics) expects volumes to significantly recover in the fourth quarter thanks to increased plant capacity from newly installed machinery.
This comes after production volumes declined by five percent in the nine months to September 30, 2024 due to power outages that impacted factory efficiencies compared to the previous period.
Nationwide power outages adversely impacted production across industry with the World Bank estimating that Zimbabwe was losing 6,1 percent of gross domestic product annually due to energy shortages.
“The installation of new equipment in the last quarter to augment certain product ranges will improve product availability and increase volumes in the last quarter,” Proplastics chairman, Gregory Sebborn said in the third trading update to September 30, 2024.
“The impending rainy season is expected to catalyse a surge in project completions, benefiting our Q4 performance.”
The group also expects the solar project which was successfully commissioned the previous quarter to mitigate the impact of power outages.
The company faced significant headwinds in the third quarter, including liquidity constraints, exchange rate volatility, and nationwide power outages.
“The new currency initially achieved exchange rate stability, but its limited availability hindered significant transactions. As the new currency increased in the market, exchange rate volatility also increased, making local currency transactions challenging,” Sebborn said.
During the period under review, the group registered a four percent decline in sales volumes to 4,800 tons, resulting in a 10 percent decline in revenue to US$14,522 million compared to US$16,163 million in the previous year.
“Government’s prioritization of road infrastructure rehabilitation projects led to a shift in focus away from water and sanitation initiatives, thereby impacting the group’s potential revenue streams,” Sebborn said.
While production volumes similarly decreased by five percent, the stable raw material availability allowed the company to fulfill backorders and replenish inventory. newsdesk@fingaz.co.zw
