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Major shareholder cuts off forex support to Nampak

BY FIDELITY MHLANGA

PACKAGING manufacturer Nampak Zimbabwe says it has been cut off by its major shareholder Nampak Holdings, which has been assisting it with foreign currency due to non-payment of outstanding debts.

The company’s managing director, John Van Gend, told an annual general meeting on Wednesday that the company had grown its export base in the region over the past year, though it was not sufficient to cover operational costs.

Van Gend said the biggest challenge facing the company was inadequate foreign currency to source raw materials.

“We are continuing to develop export markets for our products and have grown our exports into the region, particularly Malawi and Democratic Republic of Congo over the last 12 months. However, these exports are not yet enough to fund our raw material import requirement,” he said.

“Overall, we continue to look for areas where we can rationalise and improve the business, with focus on continued cost control, growing our exports and preservation of shareholder value,” he said.

Van Gend said during the first quarter ended December 2018, Nampak’s subsidiary Hunyani started to experience large volumes ahead of the prior year, as demand for local commercial corrugated products remained high, adding that it was receiving orders for local and export orders for tobacco boxes.

He said the company’s unit, Megapak, was attracting a strong demand for beverage-related products with a sizable export market into the DRC.

“I am pleased to report that demand is firm across all sectors of our group, and our turnover for the first quarter was ahead of the comparable period last year by 13%.We must however acknowledge that there is a certain inflationary element in the numbers,” he said.

Going forward, Van Gend said management would continue to cut costs, though it was becoming more challenging in the face of mounting inflationary pressures.

source:newsday

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