Ingwebu to set up PET, water bottling plants

THE Bulawayo Municipal Commercial Undertaking owned Ingwebu Breweries is working on establishing a polyethylene terephthalate (PET) plant at their depot so as to package their beer in takeaway bottles and help improve their market share.

This comes as the brewery managed a profit of US$111 024 for the second quarter, however, this fell short of their targeted profit of US$429 000. According to the organisation's second quarter performance report it was noted that there was need to source funding and procure the PET plant which required US$1,3 million.

"The organisation managed to sell 10,16 million litres against a budget of 11,4 million litres and a previous year quarter volumes of 7,8 million litres.

"The organisation managed a profit of US$111 024 for the second quarter against a budgeted profit of US$429 790 and a previous year quarter profit of US$256 138.

"Key to note is the change in market dynamics which has seen customers preferring to buy PET carbonated beer as takeaways from outlets due to the impact of the Covid-19 pandemic. This has resulted in our major competitor enjoying increased market share due to the ability to supply opaque beer in non-refundable containers," reads the report.

It was further revealed that the organisation faced challenges with increases in packaging material costs which was negatively affecting its profitability.

"The lids prices increased from US$32,55 to US$50,18 per thousand lids and two litre calabash containers from US$0,60 to US$0,69 in the first six months of the year. The organisation made a profit of US$326 391 for the six months against a budget of US$733 765 and a profit of US$711 031 for the previous year.

"The two Mahewu flavours, namely, Peach Apricot and Traditional Extra Malt which were introduced in the previous quarter have done exceptionally well hence increasing the competitiveness of our product profile in the market," reads the report.

Regarding the PET plant, the report notes that a deposit of US$265 000 has already been paid utilising funds acquired from the Reserve Bank of Zimbabwe auction market.

"Application has been made to Ecobank for a loan facility amounting to US$2 million to finance the remainder of the US$1 107 456 capital outlay. The loan facility is currently awaiting approval by the bank's credit committee within the next three weeks."

It was further revealed that they were also working on completing payment for a water filler for the water bottling project, with 50 percent of the required US$335 000 having already been paid to the supplier and the balance being paid off utilising internally generated funds.

"Management plans to acquire two delivery trucks and one interlink truck at an acquisition cost of US$90 000 and US$261 000 respectively. The acquisition will be financed through the Ecobank loan facility amounting to US$2 million.

"The measure will ease reliance on hired trucks.

"The organisation will be targeting to sell 140 litres per day. The organisation also plans to acquire one chiller every month in the third quarter of 2021. So far, the organisation has managed to buy two chillers and this will enhance sales and growth and visibility for our Mahewu product in modern trade outlets," reads the report.

The performance report further states that for the Mahewu product, the company will be introducing a buttermilk flavour with improvements to the recipe having already been finalised.