Delta urged to explore export market

INDUSTRY and Commerce Deputy Minister Raj Modi says Delta Corporation Limited should consider exploring and fortifying export markets to enable it to boost its foreign currency coffers in the wake of rampant smuggling of its products across neigbouring countries' borders.

In an interview with Sunday News Business last week after a tour of Fairbridge Chibuku Super Plant in Bulawayo, Deputy Minister Modi said most local companies were losing a lot in potential revenue owing to their failure to apply for export permits culminating in the smuggling of their products by unscrupulous individuals that would have realised a niche market beyond borders.

He said Delta Corporation's sorghum brewed beer brands, Chibuku Super and Scud were finding their way into neighbouring countries especially Botswana and South Africa thus there was a need for the company to consider tapping into the regional market so as to realise the much needed foreign currency.

"Delta should consider exporting their products to neighbouring countries and not to leave it to smugglers to do so because I have seen the Chibuku products in South Africa and Botswana, which shows that there is demand there. So my advice to Delta is that it should explore markets outside the country and expedite the process of acquiring an export permit from my Ministry," said Dep Minister Modi.

He said the Chibuku Super plant was not operating at full capacity owing to a myriad of challenges chief among them being failure to raise sufficient foreign currency to procure back up spares.

"The Chibuku Super plant is operating at about 50 percent capacity utilisation due to a number of challenges that they have been facing.

However, the plant could operate at full throttle if the company was earning substantial revenue from exports," Dep Minister Modi said.

According to officials at Fairbridge, the plant's capacity utilisation nosedived from 92 percent in November to 50 percent this month owing to lack of adequate foreign currency to import spares and other essential raw materials, which cannot be procured locally.

Deputy Minister Modi said the Government has noted with concern that the revival of most industries was being frustrated by the prevailing foreign currency in the country and a number of measures are being undertaken to address the situation.

"Our major concern at the moment is foreign currency, which is not available. Most of the raw materials and spares, which these companies use are imported and thus as Government and Ministry we are working tirelessly to access funding through the Infrastructure Development Bank of Zimbabwe. We are also working towards making sure that the manufacturing industry is able to have direct access to foreign currency as we seek to ways of how best we can assist these industries," he said.

Meanwhile, Delta Corporation is struggling to raise $350 000 annually for care and maintenance work at its Belmont plant in Bulawayo due to lack of foreign currency.

Addressing Industry and Commerce Deputy Minister Modi after a tour on Friday, Belmont plant manager Ms Enita Moyo said the plant has gone for over three years without undergoing care and maintenance due to lack of foreign currency to procure all the requisite spare parts.

"This plant needs about $350 000 for an annual overhaul of equipment but since we haven't had an overhaul for three years we might need more than that amount to recapitalise. We need US dollars for procuring brewing equipment and euros for our packaging equipment like empty bottle inspectors, which checks bottles for any foreign objects before we put beer in them," she said.

The Belmont plant brews lagers. Ms Moyo also noted that the company needs substantial funding to replace part of its obsolete machinery.

"Some of the equipment and technology we use here is over 30 years old meaning that we are still using equipment from the 80s," she said.

Ms Moyo said the plant was operating around 70 percent capacity due to the inefficiencies of its machinery and poor supplies of strategic raw materials owing to unavailability of adequate foreign currency.

"Currently we are operating at 70 to 75 percent capacity. When everything is okay in terms of machinery and other required materials we can produce 3 500 hecto litres per day. Currently we are producing about 3 000 hecto litres and other days we produce about 1 000 due to glass shortages," she said.

Ms Moyo said there was a need for the Government to assist the company to secure foreign currency so as to keep its business afloat.