Nampak Suffers Volumes Decline

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By Alois Vinga

PAPER and packaging group, Nampak Zimbabwe suffered significant volumes decline across its business units attributed to the harsh Covid-19 impact on the local economy in the past year.

Presenting the group’s performance for the period ended September 30 2020, the group managing director, John Van Gend said the pandemic’s impact took a huge toll on the business.

“Hunyani volumes for the full year declined by 28% compared to the prior year. The corrugated division’s decline was driven by the tobacco case market where the local tobacco crop output was significantly down on the prior year,” he said.

He said the delayed start of this year’s tobacco marketing season due to Covid-19 concerns and a decline in regional exports also prompted the decline.

At the Mega Pak unit, the full year volumes declined by 12% against the prior year, mainly due to constrained consumer demand in the preforms market in the first half of the year.

The Carnaud Metalbox volumes for the full year declined by 34% compared to the prior year.

The shortage of foreign exchange and reduced disposable incomes in the first half of the year negatively impacted demand.

There was improved product demand in the final quarter, and access to needed foreign exchange improved through the auction system.

Softex tissue products continued to trade profitability as a result of tight cost control and an improved product mix.

“As a result, the available cash resources are expected to fund future capital expenditure projects and meet working capital requirements. In view of this, the directors have decided not to declare a dividend.

“The 2020 trading year has certainly not been without its challenges but, we believe, given the continual focus on cost control and margin preservation, that the Group is well positioned to prosper in the coming year,” Van Gend added.