Harare, Zimbabwe (News of the South)-Zimbabwe’s leading plastic pipe manufacturer Pro-Plastic has cited the absence of infrastructure development in the country as one of the major hiccups to its trade though private initiatives have covered much of the gap for the company to post a 15% gross profit for the ending financial year 2015.
Speaking at its Annual General Meeting (AGM) in Harare on Wednesday, the company’s Board Chairman Mr Gregory Sebborn said gross profit grew to US$3 million as the gross profit margin improved to 23% from 21% in prior year.
The Statement of Financial Position also remained sound with total assets amounting to over US$12 million after the company successfully converted its short term debt to long term at an effective rate of 8,5% per annum.
“Despite the lack of infrastructure development in the country, demand for most of the Group’s products remains robust”.
“This demand is underpinned by housing development projects, irrigation projects and the rehabilitation of decaying and old piping infrastructure”, he said.
“Our relationship with suppliers of raw materials continues to strengthen and we are enjoying more favourable trading terms”, he added.
Sebborn outlined that as the group continues to pursue its plant replacement and modernization strategy it is important that capital employed in the business be optimized in order to ensure that shareholders received an appropriate and attractive return on their investments.
The company’s CEO Mr Kudakwashe Chigiya explained that factory production had also been a catalyst to the positive turn.
“Factory production mirrored sales volumes with total output for the year at 4,459 tonnes, a 9% growth on the prior year production of 4,099 tonnes”.
“This was an encouraging performance considering that during the period under review, the factory was still suffering from the cumulative effect of the fire that occurred in October 2014 and the over-voltage in the first quarter of 2015”, he said.
Chigiya said the country’s piping infrastructure provided good prospects for the Group going forward as some rehabilitation work will need to be carried out though the overall business environment remained challenging with a lot of uncertainties in the market.
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