(HERALD) Mechanisation buoys Bak Storage

Mechanisation buoys Bak Storage
Business Reporter

BAK Storage is currently benefiting from the Reserve Bank of Zimbabwe mechanisation programme and non-governmental organisation contracts, TSL managing director Mr Richard Musvaire said in a trading update. Mr Musvaire said there had been business from the central bank’s programme but the business model at the division had been "altered because there had been a drop in volumes from the traditional customers Unilever, NatFoods and Victoria Foods". He added that increased foreign currency earnings had been achieved from the region.

On the whole of the group’s performance in the last quarter Chemco’s performance had fallen within expectations except for the retail division where restocking was a problem. Mr Musvaire said most suppliers had now received increases from the NIPC in excess of 700 percent of those ruling in December. Chemco had managed to access a 180-day loan at 400 percent because it had been unable to access Bacossi.

"Outstanding performances had been achieved at TS Timbers and ABS, while Agpy was working on a toll manufacturing contract with Premier Stockfeeds," he said.

Hunyani had started the year on a bad note due to delays in getting approval from the NIPC and the breakdown of boilers at the paper mills. Progress has, however, been made Mr Musvaire said, adding the export order book was very good, particularly for tobacco cartons. On the whole the packaging company expects exports in the year to October to total US$12 million, up from around US$10 million in the previous financial year.

The group already had orders for 115 000 more tobacco cartons than last year’s 492 000 and there was potential for another 200 000. Mr Musvaire said the group had started running tobacco cartons two months earlier than normal since the export position had improved "considerably". But he said banana boxes to Zambia and Mozambique could easily overtake tobacco. Last year, Hunyani produced 100 000 banana boxes and already had 500 000 on order this year.

Power problems in January and February had been overcome and Hunyani was now accessing coal from Hwange and not Sengwa. On the core operations, Mr Musvaire said the group forecast that the tobacco crop for the 2007/08 season would be between 75 and 90 million kg. Mr Musvaire said since the crop had not grown in the region as expected the focus was now returning to Zimbabwe. The floors are set to open on April 22.