Nampak Zimbabwe is forecasting a stronger second-half
performance driven by rising demand from the tobacco industry, which is expected
to see record volumes this season.
The packaging solutions group, which generates a significant share of its business from supplying the tobacco sector, expects higher production volumes to drive increased demand for its products in the coming months.
According to projections by the Tobacco Industry and Marketing Board (TIMB), Zimbabwe’s tobacco crop is expected to reach about 400 million kilogrammes this year, up from 355 million kilogrammes produced during the previous season.
“Tobacco volumes at Hunyani are expected to remain firm on the back of an improved tobacco crop, whilst demand for the other categories is expected to be flat,” Nampak managing director John Van Gend said in a statement accompanying the group’s interim results for the six months ended 31 March 2026.
The company maintained a positive outlook despite uncertainty arising from geopolitical tensions in the Middle East and the ongoing conflict between Russia and Ukraine.
Nampak’s confidence follows a solid first-half performance, largely driven by strong activity within the tobacco sector.
Revenue for the six-month period increased by 10 percent to US$41,7 million compared to the same period last year, while overall sales volumes rose 25 percent.
Management attributed the increase mainly to delayed tobacco case orders from the previous marketing season, which were fulfilled during the current reporting period.
“Group volumes were 25 percent ahead of the prior period, mainly due to the carryover of late-season tobacco case orders from the local tobacco industry,” Van Gend said.
The group’s Hunyani Corrugated Products Division delivered particularly strong growth, with sales volumes rising 54 percent from the corresponding period last year.
“Hunyani Corrugated Products Division sales volumes for the period were 54 percent ahead of the prior year. Demand for the new season is expected to be firm, as the tobacco crop is projected to be above prior period,” he added.
Nampak said broader economic activity strengthened during the period, supported by improved agricultural output, favourable gold prices and increased diaspora remittances, factors that helped boost business confidence.
However, the company noted that competition intensified during the second quarter, placing pressure on some of its key packaging segments.
According to Van Gend, rising raw material costs and aggressive pricing by competitors affected profitability.
“Raw material input cost increases, combined with aggressive competitor pricing across all segments, resulted in gross margin erosion in order to maintain market participation,” he said.
Performance across business units was mixed. Volumes at the Cartons, Labels and Sacks Division declined three percent compared to the prior period, while demand for metal packaging products at CarnaudMetalbox remained subdued.
At Mega Pak, volumes increased by five percent, although growth slowed during the second quarter.
The slowdown was partly linked to operational challenges at the group’s Ruwa manufacturing plant, where persistent electricity outages continued to disrupt production.
“Ruwa remains adversely affected by persistent power cuts which worsened in the period under review. This resulted in increased plant breakdowns, due to the stop-starts, affecting operational efficiency,” Van Gend said.
To improve production capacity and operational reliability, Nampak invested US$1,3 million in expansion and replacement projects during the reporting period.
Van Gend said the group would continue implementing initiatives aimed at enhancing efficiency, improving capacity utilisation and strengthening long-term competitiveness.