Price controls that were extended to cover almost all basic commodities towards the end of last year adversely affected packaging company Hunyani Holdings because of a decline in demand for commercial packaging.
The company, however, still managed to increase sales by 150 percent from $5.3 billion to $13.3 billion. Operating profit increased by 210 percent from $862.4 million to $2.7 billion while net profit increased by 195 from $671.1 million to nearly $2 billion.
The company says operating income rose because of cost control measures and increased exports. Volumes at Corrugated Products declined but sales increased due to inflation and improved exports.
Commercial packaging fell sharply as some customers reduced production because of price controls.
Demand for tobacco packaging was also down because of a reduced crop while that for horticultural products exceeded that of the previous year.
Export sales also increased significantly compensating for the local downturn.
Volumes of paper sold at the mill were down but exports to Nampak improved. Exports at Printopak remained static while local sales were down.
The same applied at Flexible. Exports increased but they were affected by restrictions on trade with Zambia.
Demand for treated poles from the Forest division remained high. Forestry operations are back to normal following the delisting of all the company’s farms that had been designated.
Sales of tissue were also down but the results for the full year were commendable. The company spent $75.2 million on capital expenditure with the major projects being at Flexible and Corrugated.
The company is also undertaking a US$700 000 upgrading of its pulp mill.
It says, though 2003 will record another economic decline, it is positioned to improve its exports.
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