eBusiness Weekly
Tapiwanashe Mangwiro
Border Timbers is forecasting a positive trajectory and growth after exiting Judicial Management in March 2022.
The exit ended six years of uncertainty after it failed to service debts to several financial institutions worth US$20 million.
On operations, the business continued to generate positive cash despite the challenging market conditions during the nine-month period under review.
Poles transmission production increased 15 percent to 7 108 cubic metres from 6 195 cubic metres in the comparable period last year.
Lumber output was down 1 percent from 33 041 cubic metres in the previous period to 32,047 cubic metres.
Border Timbers says plans are underway to get some of its estates certified by the Forest Steward Council (FSC) to be able to penetrate European markets, which will generate foreign currency for the business and go a long way towards value preservation.
Border Timbers, the largest kiln dried lumber in Zimbabwe, is a Zimbabwean forest company with three operational divisions — forestry, saw-milling and manufacturing — with 20,002 ha under plantation across five estates in Zimbabwe’s Eastern Highlands.
It is a subsidiary of the Rift Valley Corporation. Formally established in 2012, Rift Valley Corporation is a leading agro-forestry business in Zimbabwe. For the furtherance of its forestry sustainability goals, the company managed to secure the FSC Certification for Imbeza Estate.
“This initiative ensures best forestry management practices under FSC, which gives the company access to European markets that demand FSC certified products,” the company’s finance director, Lysius Karimanzira, said in a trading update.
The FSC is an independent, non-governmental, not-for-profit organisation established to promote the responsible management of the world’s forests.
“With Imbeza Estate being FSC Certified, it is expected that new markets will be opened and plans are underway to get the other estates certified.”
He said the company’s major risk remains the loss of forest to fire.
“The company is continuously reviewing and strengthening its fire patrol teams as well as upgrading the firefighting equipment. The focus going forward is on intensifying our replanting activities, capitalizing on the rains, and advancing the winter planting plan,” he said.
Lumber sales volume was 7 percent down compared to the comparative period in the prior year.
“The reduction in sales volume was mainly driven by low production volume as a result of power outages as well as the extended rainy season that affected harvesting operations,” he said.
“The demand for lumber remains high both in the local and export markets.”
Treated pole sales volume was 17 percent higher than the same period in the previous year. This was attributed to marketing initiatives which have seen an increase in the market share within the region.
Inflation adjusted revenue for the nine months ending March 2022 grew by 5 percent compared to the same period the previous year.
“This positive performance was driven by the consistent quality of our kiln-dried timber, which resulted in better average selling prices and improved customer demand,” he said.
The differential accounting results in a biological loss of $2.2 billion under IAS 29 as compared to a $0.3 billion biological gain under Historical Accounting.
“The inflation adjusted loss is mainly as a result of the differential accounting treatment of biological asset gain by International Accounting Standards 29-Financial Reporting for Hyperinflationary Economies, which uses the balance sheet approach to account for biological gain as compared to historical accounting.”
