Art Corporation is looking to allocate US$3 million for capital expenditure this year as it aims to manufacture 50 000 batteries whilst strengthening its export position in the regional market.
In full-year 2018, US$2,2 million of its capital expenditure went into manufacturing, which saw its battery manufacturing capacity going up to 35 000 from 16 000 in the prior year.
The battery business has been driving the group's performance, recording in excess of US$32 million in FY 2018 which was a 42% increase from 2017.
Art chief finance officer Abisai Chingwecha told businessdigest that the group was confident this was a correct investment even though timing may be changed.
He said timing of the investment was key, thus the company would continue watching the markets.
"We now have capacity to do 35 000 batteries. When we started in 2014 we were at 16 000 but our target is 50 000.
What is required is not the full machinery as there are a few areas that we will do, so the minimum capex to achieve the targeted 50 000 is US$3 million.
"From the outside we are looking at the regional market. We think that there are untapped opportunities that are there. For instance, we have seen we made significant exports of about US$700 000 into Malawi," he said.
Chingwecha said there were progressive discussions with Botswana which were expected to be fruitful although the market is not big.
"We had exploratory visits in Mozambique and Angola but in those markets we need entrance fees and that is what we are working on. If we can get the right products, we believe we can still export," he said.
"Our strength unlike other battery manufacturers is that we manufacture our own raw materials. We also see that the motor vehicle population has been going up in all the countries. Obviously the timing of the investments will be key and we need to watch the markets as we go."
In FY 2018, the Exide Express network was supported by increased promotional activities that included the rebranding of the Mutare and Motor City branches while Chloride Zambia continued to recover due to improved product availability and increased market presence.