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Send  Share  RSS  Twitter  28 Oct 2010

MANUFACTURING: Bowler Is Getting Quality Earnings

 



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THE push into soft-drink bottling by Ottery-based plastics packaging company Bowler Metcalf (Bowcalf) might have been viewed as nothing more than a sideline – a nice way to keep the factory productive but not really a strategy set to rake in the big cash flows.

In recent years –as reported by CBN in previous editions – Bowcalf’s bottling subsidiary, Quality Beverages, has seen an up and down performance.

Understandably questions have been asked about Quality Beverages’ critical mass, and whether the soft-drink niche the business occupies could ever be more than marginally viable.

Pioneer Foods’ slow progress with its Pepsi venture has also raised questions around niche soft-drink bottling.

But the latest numbers from Bowcalf would suggest their investment in Quality Beverages is more than capable of bringing some momentum to bottom line.

Revenue for Quality Beverages in the year to end June 2010 topped R260 million – up a most encouraging 22% from the previous year. Better still was that attributable profits came in at a meaningful R7.9 million - suggesting that Quality Beverages is earning more than a fair trading margin despite perceptions that the products are placed mainly on price.

Quality Beverages, CEO Sharief Parker says the strong initiatives promised last year after 18 months of disappointing performance has borne fruit.

He stresses Quality Beverages brands – which include Jive and Planet – are now well established and accepted. “These brands are now sold on merit, not price alone.”

Interestingly, the turnover in bottling (R262 million) has drifted closer to those of Bowcalf’s core plastics packaging operation (which turned over R307 million in the year to end June 2010).

Of course, the bottling operations don’t have the trading margins of the plastics operations, which earned a wholesome R53 million at bottom line.

Parker reports that initiatives put in place in the Gauteng and Mpumulanga operations continue to result in a turnaround.

A Johannesburg bottling facility will be in sharp focus considering our current share of this market is only 0.9% and we believe much upside potential exists.”


 
 
 
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