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Delta Volumes Crumble Under Weakened Product Uptake

Production volumes for beer and beverage maker, Delta Corporation crumbled second quarter and half year 2019 ending September 30 at both its local and regional subsidiaries on account of increased price of raw materials and a generally tough operating environment that led to dampened product uptake in the Zimbabwean and Zambian markets.

Serious powers cuts and currency depreciations were consistent in both Zambia and Zimbabwe, affecting company operations.

In Zimbabwe, Lager beer volume declined 40 percent for the quarter and 48 percent for the six months compared to the same period last year.

Sorghum beer volume in Zimbabwe declined 29 percent for the quarter and 15 percent for the six months.

This is mainly because of weak product uptake as disposable incomes were eroded by inflation.

“The prices of the major inputs; maize, sorghum and packaging materials rose ahead of disposable incomes. This has led to sharper price increases which have resulted in some consumers switching from the category,” company secretary, Alex Makamure said.

At Natbrew Zambia, the volume was 13 percent down for the quarter compared to last year which is partly due to higher pricing on the back of a steep increase in maize prices and the depreciation of the Kwacha.

The company acquired majority stake in leading Zambia brewer, Natbrew Zambia.

“Consumer spending remains low as incomes have lagged the escalation in prices of goods and services. The Southern Africa region has been adversely impacted by shortages of potable water, electricity and fuel,” Makamure said.

However, Consumer acceptance in Zambian market of the recently launched returnable pack has been encouraging but capacity and power supply disruptions have affected product supply.

The Sparkling beverages volume also declined 36 percent for the quarter and 56 percent for the six months. Volume has recovered in the last quarter on the back of improved product supply and moderated retail pricing.

The company declared an Interim Dividend, of RTGS $86 111 000 at RTGS 6, 75 cents per share.

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