Nampak Zimbabwe plans to revive its timber operations in Marondera and setting up an egg tray plant at a cost of US$5 million, it has been established.

Nampak, which holds 100 percent shareholding in Hunyani Forests Limited, has already re-opened a retail outlet.

The resuscitation of the pole treatment plant and egg tray making plant, are expected to create 400 jobs.

"Resuscitating Marondera operations; the pole treatment plant and setting an egg tray plant remains the company's priority," said one source who requested not to be named because he is not authorised to talk to press.

No official comment could be obtained from the company by the time of going to print yesterday.

However, at the last company's annual general meeting in June this year, managing director, Mr John Van Gend, confirmed Nampak's plans to re-establish its presence and control over its timber estates.

He said engagements with the Government over restoration of title of its estates in line with Bilateral Investment Promotion and Protection Agreements, were ongoing so that the business potential of the estates could be unlocked.

Mr Van Gend noted that because of the socio-economic environment, it had not undergone any material improvement and he did not foresee any significant uplift for the rest of 2020, especially in view of the Covid-19 pandemic that had impacted on economic activity across the world.

He said the group, having been deemed as an essential service provider during Covid-19 lockdown restrictions, had been able to operate, albeit with lower volumes. Sourcing sufficient foreign exchange to import raw materials remained a challenge.

The revenue for the third quarter ended June 30 was 522 percent ahead of prior year quarter in historical terms, as a result of inflation assisted prices.

The cumulative revenue for the nine months to 30 June 2020 was 644 percent ahead of the prior year period in historical terms as the business adjusted prices in line with economic trends.

Volume reduction continued across all sectors of the business and margins were squeezed due to competition in the market.

However, demand remained positive across most product portfolios and all units traded profitably.

Treasury and cash flow management have been under strict control with participation on the foreign exchange auction expected to strain liquidity.

Hunyani Paper and Packaging volumes were down by 36 percent for the quarter and 31 percent for the nine months compared to the prior year periods.

Export volumes declined by 56 percent largely due to competition in the region. Volumes in the commercial segment were 13 percent below the prior year nine-month period, affected in the third quarter by depressed demand due to the Covid-19 lockdown restrictions.

Volumes at Mega Park declined by 12 percent in the quarter and by 25 percent for the nine months, mainly due to continuing contraction in consumer demand in the beverage sector. There was a partial recovery in the third quarter due to higher volumes for preforms and closures driven by indirect exports.

Sales volumes at CarnaudMetalbox were down by 48 percent and by 36 percent for the quarter and nine months respectively, compared to the corresponding periods in the previous financial year.

The major challenge, which Nampak, like other timber companies has been facing is that of illegal settlers occupying some of its estates.

Many of the illegal settlers moved onto the timber plantations during the country's land reform programme. Some of the biggest companies affected include Allied Timbers Zimbabwe, Border Timbers and Wattle Company. The illegal settlers are largely responsible for veld fires that have destroyed plantations mainly in Manicaland Province.

Copyright The Herald. Distributed by AllAfrica Global Media (allAfrica.com)., source News Service English