Delta Corporation to consolidate Pan-African operations, outlines US$50m annual investment strategy | Food Business Africa Magazine
ZIMBABWE – Delta Corporation, Zimbabwe’s largest beverage company, has strategized itself to invest in consolidating its Pan-African operations with up to US$50 million targeted to prop up contracted farmers.
To achieve a meteoric rise and deepen its roster of top-tier brands, the company will invest up to US$50 million annually to strengthen capacities across the business, according to group chief executive officer Valela Matlhogonolo, who spoke exclusively to businessdigest.
Matlhogonolo added that the appetite to execute fresh regional forays remained an important part of the business. But decisions on which assets to pounce on would depend on the performance of its present foreign operations, he noted.
Delta Corporation commands over brands that span domestic to international brands in lager beer, traditional beer, and a Coca-Cola franchised sparkling and alternative non-alcoholic beverages.
“The current focus of the business is to invest in capacity in the existing businesses, at an average of US$40 million to US$50 million a year,” Matlhogonolo said.
“This includes plant replacements, delivery fleet, information communication technology upgrades, and returnable containers. Regional expansion of the business will be guided by the performance of the already acquired businesses in the region in the last three years. We will assess opportunities as they arise.”
The new investments will also touch on supporting farmers contracted to produce raw materials like barley, sorghum, and maize to build reserves to self-sustain the business.
In the December quarter, as cited by IOL, Delta’s lager beer, soft drinks, and other alcoholic businesses recorded a significant increase in the proportion of foreign currency sales during the quarter to beyond 70%.
The company said in a trading update that there had been “a corresponding increase in the purchases settled in foreign currency, as the economy dollarises”, with consumption benefiting from “increased mining activities and diaspora remittances” and government infrastructure spending.
To meet surging demand, Delta announced plans of commissioning additional packaging this year for its lager beer brand division. The company is also investing in additional production capacity for its sorghum-based opaque beer.
According to Delta, it has noticed some emerging trends relating to the types and sizes of packaging, particularly the growth in PET and take-home packs.
In addition, the company has also noted the growth of the informal market, which requires some adjustments to the route to market and distribution strategies.
In soft drinks, the trend has given rise to growth in vending. However, the company is worried about the increased informal activity in alcoholic products which needs to be handled by licensed outlets, unfortunately resulting in the growth of illicit alcohol.
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