By Tatenda Mujeyi
Pro Plastics noted first quarter United States Dollar (USD) sales growth of up to 60% and anxieties brought through SI 142 as continuing Government’s constant policy shift at their Annual General Meeting (AGM) in Harare.
“Direct USD sales had improved significantly at the expense of the RTGS. At the beginning of the year direct USD sales were contributing 15% to converted total sales. This had since shifted to +60% before the SI 142.” Pro Plastics Chief Executive Officer, Kuda Chigiya said.
Sales volumes for the firm however decreased with the firm only realising increase in gains in it’s borehole drilling business.
“Sales volumes are below prior year by 25%. All sectors were affected except borehole drillers which grew by 195% in volumes compared to prior year as demand in that sector surged,” Chigiya said.
However, the company has managed to make significant profit both in Foreign Currency designated values and local currency.
“It is encouraging though that in USD terms, profitability for the 5 months is on budget and some 60% above prior year,” Chigiya said.
“Financial performance, in RTGS$, is well way above prior year, for both turnover and bottom line, due to inflationary pressures,” the Pro Plastics CEO said.
The power challenges and the introduction of the interbank market have made the operations difficult for the company.
“Utilities supply challenges got worse in the period with power cuts of up to 12 hours. The non availability of foreign currency on the interbank market and the volatility of the parallel rate continues to hinder price stability,” Chigiya quipped.
The economic policy adoptions instituted by government have constantly brought changes on the market and hence initiated speculative tendencies.
“The fiscal and monetary policies being implemented are constantly and significantly changing the trading environment. Of particular note is the adoption of the “local currency” (RTGS$) (now a sole legal tender), introduction of the interbank rate and so was the 2% transaction tax just to mention.”
Proplastics has also invested heavily in asset value through real estate, industrial capacitation and new networks.
“Equipping of the new factory is at 100% complete and , migration is scheduled for Jul‘19…We have expanded our branch network with the opening of a new branch in Gweru,” Chigiya added.
He, however, emphasised that with foreign currency sales having had improved prior to the announcement of statutory instrument 142 by the Ministry of Finance and Economic Development, they remain anxious on the gains and losses potentially associated with the policy shift.