TREGER Plastics, a division of Treger Products (Pvt) Ltd, is currently operating at 30% of capacity due to subdued demand, general manager Craig Lowe, has said.
Lowe told government officials led by Industry and Commerce deputy minister Raj Modi during a company tour last week that Treger Plastics had started feeling the pinch due to the prevailing harsh economic conditions.
He said his organisation was investing in plastic recycling plants to increase the division’s export earnings.
“And that business in Harare, we are generating US$80 000 per month and with the equipment and capital injection all this coming up later in the year, we will ramp up that number,” he said.
“So, we’re continuing to invest more in local content where we can use local materials and local money to turn these into forex that we can tap and keep our markets growing until the situation on the ground improves.”
He added that the situation in the business environment was now much worse than a few years ago.
“When I came here in 2013, Zimbabwe was going through a boom stage . . . but, unfortunately, the packaging industry was dominated by imports, mainly from South Africa and from the east.
“We quickly realised that there is no way you could just offer a substantive product, you had to compete with what they (consumers) were used to getting from mainly South Africa…,” Lowe said.
“So we embarked on a R100 million recapitalisation programme and that really hasn’t stopped. When I first got here we were doing about 120 tonnes a month with old equipment and we then recapitalised and quickly ramped up in 2014 to about 400 tonnes in poly and 200 tonnes on the packaging.”
At the turn of the millennium, Lowe said they could produce about 500 tonnes a month with other problems, but now due to economic volatility, they were operating at 30% of capacity.
“That continued happily until about 2017 when we started to feel the dissipation in the market. As a result, volumes started to drop. We could probably be doing 150 tonnes in poly and 100 tonnes on packaging as opposed to 400 and 200 tonnes. So again, that’s speaks to your 30% (capacity) and that has been holding firmly to that level for about six months,” he said.
“When we go around and talk to customers, it’s just that the demand is not there as it used to be. It’s not that we are suffering from imports. Customers want to buy local,” Lowe said.
Treger Plastics in 2016 invested in a plastic recycling plant at a cost of US$1 million, a first of its kind in Bulawayo.
The recycling plant, which is located in Thorngrove, recycles plastic which the company then uses as raw material in the plastic modelling department.
Lowe said they, however, remain bullish about continuing investing in Zimbabwe.
“We continue to invest, but more in local content where we can use local material, local monies …,” he said.
The company currently employs about 280 people.
Treger Products is part of the privately-owned Treger Group of companies and has been operating in Zimbabwe since 1911.
It has five manufacturing divisions — Monarch Steel, Kango Products, Treger Plastics, Zimbabwe Grain Bag and Treger Harare.
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