Turnall Holdings Limited says the acquisition of a new sheeting plant for Harare, is now at an advanced stage and it is expected to be commissioned by the third quarter of 2024.
This will significantly reduce the cost of transporting products from Bulawayo, according to the group, but more importantly will lead to increased sales volumes and an uplift in profitability.
The development will also significantly help the group’s recovery after sales volumes for the quarter ended 30 September 2023 declined 7 percent from 9,132 tonnes to 8,526 tonnes.
Business performance was negatively affected by product outages of roofing sheets owing to delays in the supply of the key raw material, fibre, due mainly to the impact of the war in Ukraine.
However, the group has already secured alternative sources of fibre like Brazil to complement the existing fibre supplies and business operations are expected to normalise in the fourth quarter of 2023.
According to the group’s trading update, building products, concrete products and AC Pipes, contributed 53 percent and 46 percent and 1 percent of the sales volumes respectively.
“Besides the fibre supply challenges, trading activity was also negatively affected by the liquidity crunch, low disposable incomes and price distortions prevailing in the economy.
“The business maintained favourable liquidity and gearing ratios through the application of robust working capital strategies. Trading in a multi-currency environment enabled the company to meet most of its foreign currency working capital requirements,” said Turnall in a trading update.
According to the trading update, the company made significant strides towards the payment for a new state-of-the-art fibre cement sheeting plant and a glass Reinforced Plastic (GRP) Plant. These new plants were funded using proceeds from a successful Rights issue.
Despite the hurdles experienced in the third quarter of 2023, the board and management remains focused on their strategies of re-capitalising the factories, enhancement of production efficiencies, cost containment and an improved product and service offering.