Major shake-up looms at Delta Beverages

Delta Corporation Head Office in Borrowdale, Harare

A MAJOR management transition is underway at listed Delta Corporation, with chief executive Pearson Gowero set to leave as the beverages manufacturer seeks to consolidate its position in a volatile market characterised by weak consumer spending and rising inflation.

Gowero took over from Joe Mutizwa in June 2012, successfully steering the beverages manufacturing concern to profitability at a time the country was reeling under inflationary pressures and an acute currency volatility crisis.

Even as Zimbabwe was buffeted by severe economic headwinds, which saw Delta Corporation struggling to mobilise foreign currency to source raw materials and repatriating dividends to foreign shareholders, the group, with Gowero at the helm, commissioned two new plants in Masvingo and Kwekwe.

Delta successfully commissioned Chibuku super plants in the country’s oldest town, Masvingo and Kwekwe at the tune of US$30 million. The company has also begun the building of a Chibuku plant in Rusape, although progress has been hampered by foreign currency shortages.

With Gowero at the helm, Delta also snapped the controlling stake in Natbrew Zambia, as the company spread its footprint in the region.

In a transaction that was sealed in 2018, Delta acquired equity from Heinrich’s Syndicate, a subsidiary of its parent AnheuserBusch Inbev SA/NV (AB Inbev). Delta is 40% owned by Anheuser-Busch Inbev, the world’s largest beer maker based in Leuven, Belgium.

Delta Corporation board chairperson Canaan Dube told businessdigest that interviews to fill in vacant management positions were held this week, with Gowero playing an influential role in the transitional process.

Dube is also set to leave, having served as board chairperson since 2010.

He told businessdigest that: “We are looking for someone who will manage the leadership of Delta into the future. There are management changes which we are introducing. A new leader will emerge from the team which is part of the group. The interviews are starting tomorrow (Tuesday).

“I have just been elected for another year to manage the transition of getting my CEO (Gowero) replaced while I am being replaced (too).”

Dube said term limits for board members at Delta are determined by age, with the age limit currently standing at 70. However, he said, board members “do not have to wait until they turn 70” to leave.

Company secretary Alex Makamure said the management of the transition process was pivoted around the group’s future growth plans, as it sought to assert its dominance on the market.

Makamure said: “The board periodically reviews the company’s succession plans for senior executives taking into account the business’s strategic growth plans, the adequacy of skills, promotions and normal retirements.

“This process involves career discussions or interviews with executives. Similarly, the board also reviews its own skills and tenure of members and has set an orderly renewal process to align with best practice and its charter. The company has a history of smooth management and board transitions.”

In a recent trading update, Delta beverages revenue was 5% down in inflation adjusted terms during the first quarter ended June 30, 2020, reflecting the impact of the Covid-19 disruptions on volume and the cost driven price changes.

All volumes went down with sorghum beer tumbling 51% during the quarter.

Lager beer volume for the quarter declined by 18% compared to the same period last year, noting the low outturn in prior year during the transition to the monocurrency system.

The Zambian market provided respite for the group after volumes at Natbrew Zambia increased by 17% for the quarter, benefiting from price moderation and the ongoing measures to revive volume growth. The sales were mostly in Chibuku Super, which is more accessible in the off-premise trade channels.

Source – the independent