Chiwenga power: Delta reverses forex decision

Delta Corporation has reversed a decision to sell its products in foreign currency after the Reserve Bank of Zimbabwe (RBZ) yesterday assured the beverage manufacturer it would provide the forex required to fund its import requirements.

The firm intended to price its products in hard currency beginning today.

The decision to reverse the notice was made after Vice President Constantino Chiwenga last night met Delta officials together with RBZ Governor Dr John Mangudya and Finance and Economic Development Minister Professor Mthuli Ncube. Dr Mangudya and Delta chief executive Mr Pearson Gowero issued a joint statement after the meeting.

"The parties agreed that Delta withdraws the notice to sell its products exclusively in hard currency, in the spirit of the multi-currency framework," read the statement presented to journalists by Mr Gowero.

"The Reserve Bank of Zimbabwe will endeavour to provide the foreign currency required to ensure that Delta continues to trade on the current basis."

In an earlier interview, Prof Ncube had appealed to private firms to be patient while Government worked on fiscal consolidation.

"We are saying the private sector should wait for us to give policy. They should be patient and see how our fiscal policy is making progress. We are making good progress in fiscal consolidation and once we are ready, we will institute the requisite monetary reforms," said Minister Ncube.

"They should not rush ahead to choose the currency they think the whole country should adopt. They should just be patient, let us work together. That is really our message," he said.

Delta wanted to sell its products in "multiple foreign currencies" such as the rand, pula, Euro, British pound and US dollars. It argued this would enable it to access key raw materials and to pay suppliers. The company said its business had been "adversely affected" by shortages of foreign currency, which had resulted in it failing to meet orders, and "in the case of soft drinks, being out of stock for prolonged periods".

It said the fiscal and monetary policy frameworks announced by the Government in October last year did not provide for "easy access to foreign currency by non-exporters". The company said it stopped making some of its products, particularly soft drinks, in November and a few soft drinks were released on December 24 for the Christmas holidays.

Delta says it requires US$2 million a month to buy raw materials such as concentrates and granules used to manufacture plastic bottles. The new prices would have seen a 300ml bottle selling at 50c; a 330ml can (60c) while 500ml PET was pegged at US$1. Lager beer prices were pegged at 80c for 375ml returnable bottles; 750ml returnable (US$1,50); and 340ml returnable (US$1). Delta said it had invested over US$600 million in plant and equipment, vehicles and ancillary services since 2009, and that there was need to "protect this investment and ensure sustenance of all value chain partners".