Local largest beverages producer, Delta Corporation Limited is set to invest more thanUS$120 millionin expansion projects after soaring demand for beer and soft drinks stretched its production facilities to capacity. The investment comes on top of theUS$44 millionalready spent over the past year, as the company moves to tackle supply shortages and intermittent stock-outs affecting some of its products. Speaking on the company’s growth strategy, Delta chief executive officer Matlhogonolo Valela said the company had underestimated the speed at which consumer demand would grow.
“We are investing behind our growth, but ahead of demand. In some of our categories, we missed the demand forecast and were pleasantly surprised by the market support,” Valela said. He said Delta’s existing infrastructure, installed about three years ago was no longer sufficient to keep pace with rising demand.
“We are operating at capacity. We have run out of capacity that we installed three years ago, resulting in intermittent out-of-stock situations,” he said. To ease supply pressures, the company has temporarily supplemented local production by importing some of its global beverage brands shared with ABI in the market.
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Delta said major expansion projects are already underway and are expected to significantly increase production before the festive season. The company expects output capacity to rise by between30% and 35% by Christmas, pushing total production to more thanfour million hectolitres.
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