SCHWEPPES Zimbabwe’s processing plants in Beitbridge and Norton are operating below capacity due to acute shortage of raw materials, the Financial Gazette’s Companies & Markets (C&M) has learnt.
This was revealed by Smart Zongololo, the general manager of Best Fruit Processors, a unit of Schweppes, which processes citrus fruits into juices and raw fruits into pastes and purees.
He said the company was targeting 20 000 tonnes of raw fruit this year, but was likely to produce less due to shortages.
Zongololo said: “The problem is that we are not getting enough raw materials in the form of raw fruits from the local market. We are not getting enough to run our factories. We want to process about 20 000 tonnes of raw fruit this year but we are not expecting to get enough because local farmers are not growing enough. Last year, we got about 2 400 tonnes of raw fruit from a target of 12 000 tonnes.
“Apart from that, we realised that the cost of inputs such as fertilisers are also a problem. We want to make sure that the costs are effective. We want to sit down with them (farmers), mobilise them and second agronomists to assist them.”
The Beitbridge Jucing Company, which was acquired by Schweppes in 2014, processes citrus fruits into juices and various by-products. Schweppes controls 100 percent shareholding in the company.
Best Fruit Processors is owned 70 percent by Schweppes and the Agricultural and Rural Development Authority (ARDA) holds the remaining 30 percent.
Schweppes is also planning to open another unit in Esigodini, in Matabeleland South Province. According to the company, the plant will be established before the end of this year.
The proposed plant in Esigodini requires about US$10 million. The company said the plant is expected to start operating in August next year.
Zongololo said the Norton plant, which was opened last year with an installed capacity of 30 000 tonnes annually, needs about US$2 million this year which will go towards infrastructure upgrade and for the procurement of inputs, such as fertilisers and chemicals.
He highlighted that the Reserve Bank of Zimbabwe governor, John Mangudya, who toured the plant a fort night ago, was keen to support the company’s projects.
The plant processes a range of fruits such as tomatoes, guavas, mangos and passion fruits.
Apart from the fruit processing plants, Schweppes‘ other product portfolio includes cordials, fruit juices, bottled water and flavoured drinks.
These products are marketed under well renowned brand names such as Mazoe, Minute Maid and Schweppes Water.
The company currently has six operational sites for such products and these are in Harare, Bulawayo, Chinhoyi, Kwekwe, Mutare and Masvingo.
The company also has depots in Kwekwe, Chinhoyi, Masvingo and Mutare. These have warehouse and distribution facilities.
Schweppes’ revenue has been on an upward trend since 2012. The company recorded revenue of US$76,99 million in 2012 compared to US$94,9 million registered in 2016.
During the 12 months to March 2016, volumes went up four percent from that reported in the same period in prior year.
Volume growth and benefits from price roll backs have spurred growth.
During the period under review, profit margins were positive with an average of 4,4 percent.