Auction meets bulk of Nampak forex needs - The Herald
PACKAGING products supplier Nampak Zimbabwe says the bulk of its foreign currency requirements have been met through the Reserve Bank of Zimbabwe (RBZ) auction system, which has been complemented by US dollar sales.
The RBZ introduced the auction system in June last year with the platform quickly becoming the preferred source of forex for registered operators. Since its inception, the auction has disbursed about US$1,7 billion for key imports.
The central bank contends the auction system has been instrumental in establishing prices and the exchange rate, which triggered inflation down spiral, helping to create a conducive environment that is anchoring projected growth of 7,8 percent this year.
Nampak, a Zimbabwe Stock Exchange (ZSE) listed counter, produces a diverse range of plastic products, which include crates, drums, tanks, bottles and closures for the local market and exports to SADC and COMESA countries such as Mozambique, Zambia and Malawi.
Mr John Van Gend, the company’s managing director, said the trading quarter to June 30, 2021, witnessed an increase in trading volumes for the group, as Covid-19 restrictions were relaxed.
“. . . although still inadequate for the group’s operations as a whole, foreign currency was more available through the auction system and was supplemented by additional amounts sourced from customers,” he said.
He noted that the foreign currency limitations and delays in disbursements continued to have the effect of creating imbalances within the supply and customer delivery chain.
For the period under review, the group’s revenue was 37 percent ahead of the prior year quarter in inflation adjusted terms and 234 percent in historical terms.
Mr Van Gend said that cumulative revenue in inflation adjusted terms for the nine month period was 26 percent ahead of the prior year period and 336 percent above the same period in historical terms.
“This was due to growth in sales volumes and adjustment of selling prices to reflect the economic trends,” he said, adding that the availability of raw materials remained challenging, but Group units traded profitably in the period under review.
Mr Van Gend said the group’s net working capital remained positive and the company had a cash holding of $528 million at the end of the third quarter, which is being used to reinvest in raw materials and settlement of trade payables.
In terms of segmental performance, Hunyani Paper and Packaging volumes were 38 percent up for the quarter and 23 percent ahead for the nine months compared to the prior year period.
Mr Van Gend said volumes in the commercial sector grew by 63 percent in the previous nine month period led by improved demand and ongoing customer recovery.
“The tobacco sector was 4 percent below the prior year nine month period due to the lower tobacco crop last year and the delayed start to packing this year.
“The year to date decline in the export market was 19 percent due to Covid-19 impacts in regional markets,” he said.