eBusiness Weekly
Enacy Mapakame
Conveyor belts manufacturer, General Beltings Holdings Limited, is angling to cash in on the supply gaps emanating from the impacts of the Russia – Ukraine war by expanding the domestic market.
Since the invasion of Ukraine by Russia, the world over has felt shocks, with a spate of price increases already felt in Zimbabwe.
GB chairman, Godfrey Nhemachena, indicated the group will now target meeting the anticipated increased local demand as the market will turn to local suppliers in the face of logistical challenges caused by the war.
He added the conflict, threatened to plunge the world into chaos particularly the sources of primary raw materials.
“General Beltings is expected to increase its market consolidation as the anticipated logistical constraints emanating from the conflict will compel its existing customers to replace imports with locally produced products.
“Recent price increases in fuels and natural gas signal more severe measures that will inevitably constrain logistical supply chains and thereby dislocate the growth trajectories of the global economy,” said Nhemachena in a performance update for the year to December 31, 2021.
During the year under review, GB’s overall volumes increased by 113 percent at 1488 tonnes when compared with prior year’s 699 tonnes. Following concerted effort to penetrate and consolidate in new markets, the chemical division shored up volumes in the last quarter which contributed significantly to the increase while the rubber division benefited from a consistent order book throughout the year.
At $575 million, total turnover was 7 percent above prior year’s $537 million attributable to the increased volumes.
“The company benefited from its technical partnerships as the flow of materials was sustained despite the violent disruptions in South Africa and the logistical delays further afield in countries of raw materials origin.
“Unrelenting inflation and the strengthening of the Rand against the United States Dollar contributed in the increased production costs and put pressure on gross margins,” said Nhemachena.
Resultantly, gross profit at $246 million dropped by 11 percent from the prior year’s $278 million.
Operating costs came in at $203 million, which was an increase of 35 percent due to the costs that tracked the parallel exchange rates. As a result, a net operating profit of $44 million was recorded against the prior year’s $140 million.
Volumes at the rubber division increased 3 percent to 310 tonnes compared with the prior year’s same period of 301 metric tonnes driven by a consistent order book and improved throughput.
Due to the pricing constraints the divisional turnover at $290 million dropped by 17 percent from the prior year’s $347 million.
At Cernol Chemicals, total volumes of 1,178 metric tonnes represented an increase of 196 percent from the prior year’s 398 tonnes due to consolidation efforts in new market niches with deliveries in the fourth quarter accounting for 514 metric tonnes. Resultantly, turnover rose 50 percent to $286 million.
Nhemachena said the division will strive to reassert its market position as the Covid-19 regulations are relaxed.
He said: “Given the recent labour mobility trends the company will further invest in key skills retention and development to ensure improved performance in the year 2022.”
