• Tue. Nov 29th, 2022

Delta embarks on capacity expansion drive in FY23

ByEconomic Times

Nov 17, 2022

By ETimes

Listed beverage maker, Delta Beverages embarked on capacity growth across all its sectors with four new production lines to be commissioned in the next six months.
 
The beverage producer said it will commission new lines for Super Chibuku, Chibuku, PET drinks and another Chibuku line in South Africa between now and May 2023. This comes after the company admitted that it cannot increase the PET and Super Chibuku supply in the country as they have maxed out on production.
 
Speaking at an analyst briefing, Delta chief executive officer, Mr Matlhogonolo Valela said, “The way we have seen our capacity on PET and Super Chibuku max out, we will see new lines coming into play with the PET line being commissioned in the first quarter and a new Super Chibuku line in May 2023 latest.”
 
This comes after the company said it ramped up Scud production to meet demand as Super production is maxed out and supply cannot be increased.
 
The chief executive officer also said the company will start to utilize its farmers as they seek to ramp up production and reduce supply chain disruptions. “We need to go back to utilizing our farmers and begin farming maize, sorghum and barley interchangeably,” Valela said.
 
The lager beer volume grew by 18% for the six months compared to prior year.
 
Valela said, “The increase in volumes was due to product supply stability that has benefited from the injection of returnable glass bottles and intense plant maintenance which was undertaken in the period under review”
 
However, the company acknowledges that production capacity remains constrained and will be unlocked when a new plant is installed in the first half of 2023. The supply of non-returnable bottles and cans was affected by regional shortages and supply chain disruptions as some material comes from the Middle East and India.
 
The sorghum beer volume in Zimbabwe grew by 14% for the half year compared to the prior year. The growth is driven by the revival of the Scud pack.
 
In terms of volumes for the six months to September 2022, the brewer sold a combined 2 084 hectolitres (Hls)
 
United National Breweries South Africa recorded a volume growth of 38% over prior year, as the business focuses on winning back the consumers into the category.
 
“There are ongoing efforts to expand the product range and to rationalise the production and distribution footprint. There is an encouraging uptake of Chibuku Super by the market. In the same vein, Butterworths brewery, located in Eastern Cape province, has been reopened to address product supply and the cost of distribution,” Valela added.
 
The volume decline at Natbrew in Zambia has halted with a growth of 7% in the second quarter as it was affected by an increase in excise tax in the jurisdiction.
 
According to the chief executive, the country needs to level the playing field in order to help traditional beer manufacturers. Despite the issue of excise tax, the Chibuku has made a great recovery making it one of the best performing beers in the country.
 
Going forward, the focus is on revamping the route to consumer, market penetration with new pack formats and utilising the available Chibuku Super production capacity to cover the regional supply gaps – Harare

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