NamPak bemoans 12 hours power outages knock on production

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By Alois Vinga

LISTED packaging materials supplier, Nampak Zimbabwe has bemoaned 12 hours long power cuts saying they have a huge toll on production and in turn have stifled timely order deliveries.

Power outages have escalated in Zimbabwe, with the Zimbabwe Electricity Supply Authority (Zesa) citing vandalism of its infrastructure.

Load-shedding has seen some parts of the country experiencing 20-hours blackouts, disrupting all economic activity, from heavy industrial sites and central business districts to backyard workshops.

Presenting the performance report for the first quarter of 2023, NamPak group managing director, John Van Gend said power cuts were severely felt at some of the group’s units.

“The electricity supply which deteriorated considerably during the quarter curtailed our ability to fully meet customer requirements.

“Megapack experienced power cuts of up to 12 hours a day, while CMB had no electricity supply since 18 December 2022. While the operations have backup generators, these do not cover the entire plant at MegaPak and CMB and are not designed to operate continuously,” he said.

Authorities have however promised that the ongoing power outages are set to ease in the second half of the year on the back of recovering water levels at Kariba Dam as well as the connection of an additional 300 megawatts from Hwange Thermal Power Station.

During the period NamPak saw volumes for the quarter just at 3,3% ahead of the prior year with turnover for the quarter at 457% ahead of the prior year period in historical terms.

Inflation adjusted trading profit at ZW$3,1 million was 63% ahead of the previous year and 431% ahead in historical terms with gross and trading profit margins remaining flat when compared with the prior year period.

The group cash position was ZW$2,221 million as at 31 December 2022.

Volumes at Hunyani Corrugated Division for the first quarter were 13,6% up on the prior period. The main contributor to the growth was the improved tobacco case orders from the region, as well as some carryover of late season orders from local tobacco merchants from the previous financial year.

Despite a strong order book, commercial sales were below the previous year by 4% owing to continuing challenges with paper supplies from SAPPI, following a problematic start up after their shut down at the end of the last financial year.

At MegaPak, the first quarter volumes were 10% below the comparative period last year.

Performance and closure sales were down as major customers imported products ahead of the festive season.

The sales volume for the quarter was 1% above the same period last year. Plastic volumes, especially closures were well ahead of prior year but metal volumes were down due to power outages during the last two weeks of December which meant that the unit was only able to operate at 50%.