Delta unit seeks govt intervention on interest rates

HARARE - Delta Corporation Limited (Delta)’s subsidiary, Megapak — the sole manufacturer of plastic crates in Zimbabwe — says government should regulate loan interest rates to facilitate cheaper borrowing.

The unit, facing capitalisation challenges, is seeking capital to
replace its antiquated  machinery.

“We need affordable capital and if government can help regulate lending rates, we will be grateful.

“We have not been able to replace our machines in the past 10 years,”

Megapak’s managing director Martin Makomva told a Confederation of Zimbabwe Industries (CZI) facilitated tour of the manufacturer’s Ruwa plant.

Megapak, 51 percent owned by Delta,  has a 95 percent market share of the plastic crates industry and produces about 250 000 crates per month.

Demand for its products is highest from Delta, while capacity
utilisation is around 60 percent. Makomva said if the company failed to secure affordable loans, the plant may shut down, which would  “be a shame as the country will start importing crates”.

In 2008, the company manufactured over 100 tonnes of packaging products, but production tumbled to just below 50 tonnes in 2013. Makomva added that the company faced power challenges, forcing them to invest in heavy duty generators.

“In an environment like we are operating in, we are definitely better but by no means good. Businesses have to be innovative and protect their interests, but we really need government to chip in and level the play field,” he said.

“We are importing raw materials and all our suppliers require cash up front and this is not helping matters on our part,” he said, adding that they faced high import tariffs.

The company imports raw materials from Austria, China and South Africa.

South Africa’s Nampak also holds a stake in Megapak.

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