PLASTIC pipe manufacturer, Proplastics Limited (PL) says its operations during the first quarter were plagued by incessant power cuts which “significantly” compromised production.
In its financial year report for the period ended December 31, 2022, released in March, PL reported that the power supply situation had not improved, and remained the major risk going forward.
The group announced that it was working hard to ensure this risk is mitigated and the market does not suffer supply gaps.
This comes as the country is experiencing several hours of daily power cuts owing to low power generation from the country’s top two electricity generation units, Kariba South Power Hydro Station and the Hwange Thermal Power Station.
In a statement for the first quarter of the year, released last Friday, PL chairperson Gregory Sebborn said the power situation affected production during the period.
“The just-ended quarter was marred by serious power cuts which significantly compromised production throughput and efficiencies,” he said.
“Production was largely run on a high-cost diesel-powered generator, thereby impacting on the price of the final product. Electricity supply remains the biggest challenge for the business going forward.”
He said despite the drawback of the power challenges, the factory remained capacitated to convert all orders in time because of investments into a new and modern factory.
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Last year, the company reported that the business may have lost a month of planned production due to power disruptions and that the group incurred considerable supplementary costs in operating the large back-up generators.
“Production volumes grew by 10% compared to the previous period despite production interruptions related to power cuts which also affected the sales product mix. The raw material supply was consistent throughout the quarter,” Sebborn said.
During the quarter, PL sales volumes grew by 10% compared to the same period last year while revenue remained flat compared to the previous year as the firm's selling price retreated.
This was due to a reduction in global prices of major raw materials.
However, the contribution from exports was 15% to total sales revenue, representing a 91% growth compared to the same period last year.
Sebborn said demand was expected to improve driven by public and private sector-initiated projects while revenue inflow was mainly skewed towards United States dollars.
“Despite the drawback of the power challenges, the factory remains capacitated to convert all orders in time as a result of modern investments into the new factory,” he said.
Last year, PL commissioned a fully automated polyvinyl chloride and high-density polyethylene pipe manufacturing facility to add 6 000 tonnes to its then production capacity of 9 000 tonnes.
The factory allowed the company to meet domestic demand and expand exports into the southern African region.
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