Zimbabwe Stock Exchange (ZSE) listed beverage manufacturer, Delta Corporation, will this Friday introduce a new pricing regime pegged in United States Dollars, as part of efforts to sustain its operations.
The flagship blue chip company had been struggling to provide its local market with some of its products, especially its wide range of soft drinks.
Delta has also cited the ever escalating prices of local material and services that demand payment in foreign currency exchange rates, as one of the contributing reasons behind its decision.
“In order to sustain its operations the company advises the retail and whole customers that its products will be charged in hard currency with effect from January 4 2019,” said the company’s management in a statement.
Delta management confirmed its business has been adversely affected by the prevailing shortages of foreign currency resulting in the company failing to meet consumer orders and in the case of soft drinks, being out of stock for prolonged periods.
Management said the country’s new fiscal and monetary policy framework that was put in place since October 2018 did not provide for easy access to foreign currency by non-exporters.
“The company has only received limited foreign currency allocations from the banking channels, which have not been adequate to fund the import requirements. Resultantly all our foreign suppliers are unable to continue providing credit or meet new orders as some of them have not been paid for extended periods.”
However, Delta noted that its products are fairly priced in USD and have remained largely unchanged since 2013 and has to continue safeguarding its investments.
“The company has invested in excess of US$600 million in plant and equipment, vehicles and ancillary services in 2009. There is a need to protect this investment and make sure there is sustenance of all value chain partners. The prices of local materials and services have escalated both in USD and RTGS (ostensibly in response to the foreign currency exchange rates,” said the beverage manufacturer.
The management pointed out it does not trade on the parallel or black market and did not subscribe to any exchange rate between the USD and RTGS or Bond notes as these were not currencies.
“There is need for wider consultation on policy interventions to build consensus and market confidence among stakeholders to stabilize the macro economic environment,” said Delta.
