PCL outlines growth plans

Dual-listed conglomerate Press Corporation Limited (PCL) on Thursday outlined its strategic plans that will drive expansion agenda in the short to medium-term.

Speaking during a business and strategy meeting with its shareholders in Blantyre, outgoing PCL group chief executive officer Matthews Chikaonda said high on the agenda is the localisation of foreign loans, expanding its footprints in the region and growing the Carlsberg brand on the continent.

He said for a company that has grown big from a K4 billion net worth in 2002 to the current K90 billion, it needs to apply strategic decisions to remain on top of the game and increase the margins.

Said Chikaonda: “Carlsberg Malawi has now been given a chance to go on the global market, thereby increasing our capacity to enter that big platform. For instance, we produce 350 000 hectolitres of beer in Malawi while Castel produces 60 million hectolitres. The plan is to at least hit a million hectolitres, thereby expanding job opportunities.

“The beer portfolio remains the same. These licences are intact for the next five years for Coca-Cola and 10 years for Carlsberg.”

In August, Carlsberg Group sold its 59 percent stake in Carlsberg Malawi Limited (CML) to privately-owned French company, Castel Group.

On cushioning the effects of depreciation and a volatile exchange rate, Chikaonda said the company has since localised its foreign loans in newly established Open Connect Limited (OCL).

“The exchange rate policy does affect us. Government has to be responsible. Interest rates in Malawi are high, so, we want to take advantage of low interest rates on the international market, borrow there and pray that the currency does not depreciate to wipe off the interest advantage of foreign loans.

“We have localised $21 million [K15 billion] of foreign loans we had in OCL to protect ourselves from further huge exchange losses,” he said.

Chikaonda also hinted at diversifying into other markets beyond Malawi broders by 2019.

PCL group financial controller Elizabeth Mafeni said the company has projected a growth of 32 percent on improved performance in Limbe Leaf Tobacco, Puma Energy, Macsteel Limited and Carlsberg.

However, she expressed fears of reduced consumer demand on account of high inflation rate and drought.

In the half-year ended June 30 2016, PCL group registered a 17 percent decline in profits from K9.7 billion last year to K8 billion this year on account of continued dampened operating environment characterised by compressed demand, a weakening local currency, high interest and inflation rates.