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Weak demand affects Proplastics’ sales

Listed pipe manufacturing concern, Proplastics’ sales volumes for the five months to May 31, 2019 declined 25 percent on the back of declining consumer spending, although the manufacturer’s borehole drilling supplies grew 195 percent as demand in the sector improved.

Proplastics’ chief executive officer Kuda Chigiya told The Herald Business on the sidelines of the company’s annual general meeting yesterday that the company’s order book has been affected by a decline in disposable incomes.

“Sales volumes are below prior year by 25 percent. All sectors were affected except borehole drilling which grew by 195 percent in volumes compared to prior year as demand in that sector surged.

“Our order book is low because the RTGS balances for both the Government (to sponsor capital projects) and for individuals has been heavily depleted.

“And before the introduction of Statutory Instrument 142 of 2019 everyone was asking for the United States dollars, which were not available in the market so at the moment I think the reason why our demand and order book is so low because the disposable incomes are at their lowest in a very long time,” said Mr Chigiya.

The Proplastics boss also highlighted that during the period under review operations were affected as the manufacturing concern had to scale down on production.

“The decline in sales affected operations because we had to slow down on our production levels we had to reduce the number of contract labour in our business and we also had to adjust our cost structure in line with the  revenues that we were generating t

o make sure that we remained profitable and sustainable.

“At the moment we are running at about 25 percent capacity utilisation and the same period last year we were running at about 65 percent,” he said.

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