SA packaging group survives price pressure

- Last updated on GMT

Related tags: Soft drink

Bowler Metcalf shrugs off increased raw material costs to post an
18 per cent rise in pre-tax profits in the first half.

Severe pressure on raw material prices took their toll on South African packaging group Bowler Metcalf in the first half of the year, but the company nonetheless reported a 21 per cent rise in revenues to R67. 3 million in the six months to 30 June.

Pre-tax profits were up by 18 per cent to R14.9 million, but would have been higher still if not for an R8 million increase in operating costs to R47m and a small interest charge.

Operating profits were adversely affected by the depreciation of the rand, but the company told the Business Day​ newspaper that it was satisfied with the results in the light of the difficult market conditions. An increase in selling prices implemented on 1 June to compensate for higher costs will help improve the performance in the second half, the company added.

The first half has been a busy one for the company, with investments of R8.5m in new equipment and a further R9 million set aside for more purchases later in the year.

Bowler Metcalf also expects to start construction of a carbonated soft drink plant in Cape Town before the end of the year, and a further soft drink plant could be opened in Guateng if necessary. Earlier this year, the company said it would be constructing bottling and packaging plants in the Western Cape via a joint venture with Quality Beverages 2000.

Related topics: Processing & Packaging

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