Zimbabwe’s Delta Corporation invests US$1.1m in sorghum production to meet rising beer demand

ZIMBABWE – Delta Corporation Limited, leading manufacturer and marketer of both international and locally produced beverages has invested US$1.1 million into sorghum planting under a strategy to secure inputs for its massive operation.

The Zimbabwe Stock Exchange listed blue-chip, has recently been making fresh forays into domestic and foreign markets, unlocking opportunities for growth and higher demand for beer.

The US$1.1 million injection, according to Zimbabwe Independent, will be channelled production of 13, 425 tonnes of sorghum to quench up the thirst of beer lovers as demand rises.

“We have invested US$1.1 million in the current season for the production of 13 425 tonnes of sorghum. A total of 9 508 hectares were planted this season compared to 9 209 hectares planted last season due to a marginal increase in anticipated beer demand,” Corporate Affairs Executive Patricia Murambinda said.

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The company’s sorghum requirements vary every season depending on projected domestic beer consumption levels but on average it takes up a total 13 000 tonnes of red and white sorghum annually.

It has been an eventful year at Delta, which recently finalised a deal to take over Mutare Bottling Company (MBC), an asset that has strategically placed it at the heart of a bustling region, making up 10% of Zimbabwe’s beverages market.

“We have invested US$1.1 million in the current season for the production of 13 425 tonnes of sorghum. A total of 9 508 hectares were planted this season compared to 9 209 hectares planted last season due to a marginal increase in anticipated beer demand.”

Delta Corporation Corporate Affairs Executive – Patricia Murambinda

The deal whose value was not disclosed was announced after a key regulator agreed that it would not create monopolies.

It gives Delta’s sparkling beverages franchise fresh growth impetus through forays into a region that has seen investor interests since diamond multinationals trooped to exploit the resource about a decade ago.

Delta produces soft drinks under licence from the Coca Cola Company.

The MBC transaction had already attracted market interest since it was announced last year, with researchers at Inter Horizon Securities predicting that it potentially laid the foundation for a 700% growth in revenue during the full year to March 2021.

Delta reports 33% rise in revenue

In its 2021 interim results for the third quarter, the group’s revenue grew by 77% for the quarter and 33% for the year to date.

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This reflects the significant volume recovery across all beverage categories and attention to replacement cost-based pricing.

The group also benefited from the improved access to foreign currency through domestic Nostro sales.

In terms of volume, the Lager beer category grew 48% for the quarter and 20% for the nine months compared to the same period last year.

The sorghum beer volume in Zimbabwe grew 29% for the quarter but still trailed prior year by 14% for the nine months.

Volumes at Natbrew Zambia declined by 2% for the quarter and is up 5% for the nine months as its South African entity, United National Breweries recorded a year-on-year decline of 19% for the quarter as South Africa implemented very strict restrictions and bans on the sale and consumption of alcohol.

Sparkling beverages volume grew by 66% for the quarter and is up 42% for the nine months compared to prior year.

While, African Distillers (Afdis) registered volume growth of 37% for the quarter and 25% for the nine months driven by the spirits and ready to drink ciders.

The beverages volume at Schweppes Holdings recovered and registered growth of 24% for the quarter but is down 2% for the nine months.

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