Delta Unveils US$120m Expansion Drive as Demand Outstrips Supply

By Tinomudaishe Muzanenhamo

Local largest beverages producer, Delta Corporation Limited is set to invest more than US$120 million in expansion projects after soaring demand for beer and soft drinks stretched its production facilities to capacity.

The investment comes on top of the US$44 million already spent over the past year, as the company moves to tackle supply shortages and intermittent stock-outs affecting some of its products.

Speaking on the company’s growth strategy, Delta chief executive officer Matlhogonolo Valela said the company had underestimated the speed at which consumer demand would grow.

“We are investing behind our growth, but ahead of demand. In some of our categories, we missed the demand forecast and were pleasantly surprised by the market support,” Valela said.

He said Delta’s existing infrastructure, installed about three years ago was no longer sufficient to keep pace with rising demand.

“We are operating at capacity. We have run out of capacity that we installed three years ago, resulting in intermittent out-of-stock situations,” he said.

To ease supply pressures, the company has temporarily supplemented local production by importing some of its global beverage brands shared with ABI in the market.

Delta said major expansion projects are already underway and are expected to significantly increase production before the festive season.

The company expects output capacity to rise by between 30% and 35% by Christmas, pushing total production to more than four million hectolitres.

Valela said consumers should begin seeing improvements from September, when upgrades at the Harare plant start coming online.

Larger projects at the Belmont facility in Bulawayo including a new brewhouse and packaging line are expected to be completed by November.

“We hope that this Christmas everyone will have access to key products,” he said.

Further investments include a second packaging line at Belmont and another packaging line at the Southerton plant in Harare.

Delta is also modernising its ageing malting facility in Kwekwe, which has not undergone major upgrades for decades.

The plant currently processes around 40 000 tonnes of barley, a capacity the company expects to fully utilise by 2027 as demand for lager beer continues to grow.

To support future expansion, Delta said it is exploring barley import programmes to address anticipated supply shortages as production scales up further.