PIPE manufacturer Pro Plastic is set to complete construction of a US$6m state of the art factory in the last quarter of the year and anticipates the agriculture sector to spur demand for its products.
Pro Plastics chief executive Kuda Chigiya said the agricultural sector contributed about 20 percent to the company’s turnover in the first half of the year.
Chigiya said the contribution of the sector to the company’s bottom line was set to increase as agriculture was a low hanging fruit that provided significant growth opportunities.
“At the moment the agriculture sector is battered and bruised but it’s a low hanging fruit and if government puts in the right policies it can provide the quickest wins and the benefits will trickle down to us. We expect the completion of the plant by October and equipping will take place next year. The major risks associated with the project have been contained so far”.
Pro Plastics specializes in the production of Polyvinyl Chloride (PVC), High-Density Polyethylene (HDPE), Low-Density Polyethylene (LDPE) pipes and related fittings.
The pipes are manufactured for various applications in irrigation, water and sewer reticulation, mining, telecommunications and building construction.
Chigiya said the construction of the factory will be supported by borrowings and internal cash generations and he also commended their bankers who had managed to secure foreign currency for the project.
He said the company was also targeting the export market with Zambia as the prime destination having received substantial orders.
Meanwhile Pro plastics posted a solid financial performance for the first half of the year.
Revenue was up 71 percent to US$10.7m against prior period while volumes grew 29 percent driven by strong demand in the first quarter.
EBITDA improved from US$903 000 to US$2.1m and profit before tax rose from US$369 218 in the same period last year to US$1.7m.
Profit after tax was US$1.2m compared to US$352 946 in the prior period.