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BizDay Zimbabwe

Delta in US$12m Chibuku expansion

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DELTA Corp is spending close to US$12 million on the expansion of its Chibuku Super plant in Chitungwiza, with annual production expected to triple to 1,8 million hectoliters.
The plant will be completed by April this year, Delta Beverages manufacturing executive Mr Brian Karemba said yesterday. And the company will ramp up production to full capacity of 33 000 bottles per hour by June after adding the 25 000 bottle/hour line.

The line purchased in Germany will be commissioned in April while production will be raised to full capacity in June. The expansion involves the construction of a new brewer house and the installation of a second integrated packaging machine.

Civil works and installation of some components of the plant are underway and some key components have been installed.

“We are in the mid-stream in terms of the project. We realised that the current capacity was inadequate and we had to create additional capacity,” said Mr Karemba.

The Chitungwiza plant is currently supplying Chibuku Super in Harare, Mutare, Chitungwiza, Bulawayo and Rusape. But with additional output, the company is hoping to supply most parts of the country.

“We would like to saturate the current market and then expand.”

Delta launched the carbonated traditional brand, Chibuku Super in March last year after investing US$6,5 million and the product has been well received by the customers.

In its trading update, Delta said sorghum beer volumes were up 18 percent in the quarter ended December 2013 and 12 percent up in nine months, “indicating a strong consumer acceptance for the category driven by the success of Chibuku Super”.

Lager beer volumes were down 25 percent versus prior year for the quarter and 15 percent for the nine months. Soft drinks or sparkling beverage volumes were also down 6 percent for the quarter and up 2 percent for the nine months.

Alternative beverages (mainly Maheu) was up 23 percent for the quarter and 42 percent for the nine months.

The new project will see a 73 percent increase in staff complement to 140 and production will be undertaken by four shifts. Overall, the business will see some transfers of staff from other parts of the business.

“This investment comes with considerable positive effects upstream in the value chain. As the overall Chibuku volume is set to grow, demand for key production and packaging raw materials is expected to rise. Sorghum malt is one key raw material whose demand will grow meaning a direct increase in sorghum hectarage,” said Delta.

As such, the Delta contract farming programme is also expected to reach more small holder farmers while capacitating current farmers to improve their hectarage. With the current demand of 1 200 tonnes of maize per week, the corn demand is also set to grow. Mr Karemba said water and electricity remained the major drags on operations as they were not reliable.

“Even though we have back-up power; it is expensive to maintain while the boreholes sunk at the site do not have the capacity to fulfil the requirements.”

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