ZSE-listed plastics pipe-maker Proplastics is set to procure new Polyvinyl chloride (PVC) 500mm extrusion production line to meet growing demand for large PVC diameter pipes as the company seeks to prop up production lines.
Without preempting the quantity of this investment, the company said, currently, its maximum capacity is limited to 400 mm diameter pipes.
This follows the completion of the new factory in Harare last year.
“The Group will focus on consolidating the capital investments made to date and ensure that requisite returns are realized. To this end, the only major investment in the coming year will be the acquisition of a new PVC 500mm extrusion production line as demand for large PVC diameter pipes continues to grow yet the current maximum capacity is limited to 400mm diameter pipes,” said the company, in its year ended December 2020 financial statement.
This further investment is expected to ensure maximum use of the new factory while the new machine is expected to be commissioned in the last quarter of the 2021.
The new factory together with the automated mixing plant had been delayed as the project Engineers from Italy could not travel due to COVID-19 restrictions, but was finally commissioned in December 2020 and is running smoothly.
“This augurs well for the future as the Group is poised to benefit from this new investment, with the initial assessment showing that targets set at the onset of the project are being exceeded,” added the company.
The company recorded turnover growth of 4 percent to ZWL1,096 billion while volumes were up 19 percent from prior year on the back of a strong second half performance.
The company attributed this mismatch to, “A significant amount of the revenue was received in United States Dollars after the introduction of SI 85 and was recorded at the interbank rate. Given the gap between the Interbank and the alternative market rate, the reporting does not necessarily reflect the true market condition.”
Despite the effects of the lockdown and relocation costs, which had a huge impact on overheads, the Group posted an inflation adjusted profit before tax of ZW$174 million and a profit after tax of ZW$ 84 million after taking into account both current and deferred tax.
The statement of financial position remained solid with total assets amounting to ZW$1.7 billion. Borrowing remained minimal with the debt equity ratio on 3.6 percent.
The company will pay a final dividend of ZWL20.50 cents per share. The dividend will have an option to be paid in United States Dollars converted at the ruling interbank rate at the closing date.