HARARE: Nampak Zimbabwe, formerly Hunyani Holdings Limited, has invested $8,6 million on plant and machinery to increase capacity and product range.
The listed packaging group has reported a five percent decline in revenue to $95,9 million for the year to September 30, 2015 on the back of low aggregate demand.
Nampak Zimbabwe is the local unit of South Africa’s packaging giant Nampak, which holds a controlling 51,43 percent interest in the entity.
In its audited financial results for the period the group said major capital expenditure during the period under review was on the perform machinery where $2,9 million was spent.
“The group spent $8,6 million on the purchase of plant and machinery to increase capacity and product range. The major expenditure was on the perform machinery (2,9 million) and the tobacco line ($2,3 million), with the balance spent on various plant and equipment, information technology, infrastructure and the vehicle fleet,” it said.
The group’s revenue for the consolidated operations (CarnaudMetalbox, Hunyani and Mega Pak) declined by five percent against the prior period -reflecting a drop in aggregate domestic demand. Operating profit was as a result of lower margins.
“Included in re-organisation costs are manpower restructuring costs of $1,1 million, mainly at Hunyani, and a once-off charge of $358,000 relating to the merger of the three businesses,” it said. On CarnaudMetalbox, the group said the subsidiary performed ahead of prior year with revenue up 13 percent and returned to profit after a loss last year. It said growth came from improved can and HPDE bottle sales.
The company managed to expand its product offering, particularly to the dairy sector, while containing costs. Hunyani’s revenue and operating profit after abnormal items decreased by two percent and 59 percent respectively on prior period.
“Corrugated products benefited from improved commercial demand and solid tobacco carton volumes. A new tobacco line was commissioned in September . . . the reduction in costs and new machinery should place this business on a solid footing for 2016,”said Nampak. It said Mega Pak revenue was down 13 percent compared to the prior year and operating profit was below prior year by 43 percent.
This was due to depressed volumes for PET and preform products, falling prices and reduced demand by the major customer for large plastic injection and blow-moulding products.
“The company continued to invest in line with customer’s demands with new perform machinery commissioned in August. Mega Pak has also adopted a more focused approach to the deployment of capital and value addition products,” it said.
In February, Nampak announced the intent to rationalise its business, with a strong focus on cost control and cash preservation as it was implementing capital expenditure projects.
