Listed manufacturing firm, ART Corporation plans to prop up tissue production threefold at its Kadoma Paper Mill (KPM) subsidiary with the completion of installation of a new tissue converting line by end of this year, 263Chat Business has learnt.
The tissue machine has capacity to produce 30 tonnes per day and will increase output from 15 to 45 tonnes per day for both local and export markets.
In its interim financial results statement, the group posted a marginal one percent gain in volumes for its paper business.
“The installation of the Tissue Mill and the new tissue converting line in Kadoma is progressing well and is expected to be complete by year end. The Board is fully aware of the challenges that lie ahead to secure raw materials and sustain production given the prevailing environment. The Group believes that this investment puts it at a critical inflection point and will approach the challenges and the new realities of doing business with a positive and proactive mindset.”
The investment will also spread risk across its manufacturing segments with the current scenario reflecting a higher concentration on battery making business which contributed 70 percent of group revenue last year.
The group operates subsidiaries which produces brands such as Chloride and Exide batteries, Softex tissue and Eversharp pens.
Currently, KPM is running its machine at 90 percent capacity which is by far higher than the industry average of about 60 percent.
Meanwhile the group posted a turnover, in historical cost of ZWL$2.957 billion which represents an increase of 100 percent from the prior year reflecting the impact of increased foreign currency sales recorded at the prevailing official market exchange rates.
The group posted a pre-tax profit of ZWL$ 115.1 million for the six months which was 15.7 percent weaker from ZWL$ 136.5 million owing to increased operating costs in line with high inflation obtaining in the economy.
The battery business performance in the local market was subdued during the period due to the cumulative impact of the pandemic which exacerbated already high levels of pressure on consumers from inflation and currency instability. Total battery volumes increased by 6 percent compared to prior year.
The paper business segment volumes recovered as the foreign currency auction market induced pricing distortions reduced in the second quarter. The relentless focus on supply chain improvements and cost efficiencies yielded positive results. Paper volumes increased by 1 percent compared to prior year.
Eversharp performed well on the back of strong demand driven by the year end national examinations and back to school preparations. Volumes increased by 39 percent compared to the prior year.
Mutare timber volumes increased by 10 percent compared to the prior year. Harvesting was affected in the second quarter by incessant rains.
