Logistics firm, Unifreight, has invested at least US$5 million in a new fleet of 50 trucks with the goal of increasing market share while also contributing to core business growth.
Chief executive officer, Rob Kuipers, said the company has just taken delivery of its first 10 brand new units and has another 40 on the way.
“It has a 36-tonne payload, which is also new. Normally, the payload on the trailer is 34 tonnes,” he said.
“So, it is a new technology lighter steel that allows for an extra 2 tonnes on the trailer. The investment is over US$5 million.”
Like any other business, Unifreight requires foreign currency to keep functioning.
However, it has been dealt a significant blow by failing to access foreign currency on time.
“We have managed to get external funding and registered a loan with the Reserve Bank of Zimbabwe, but the shortage of foreign currency is devastating for our business, but we hope that this is going to be a positive change,” he said.
On a monthly basis, the company spends about US$250 000 on spare parts. They are both sourced locally and abroad.
“But we had a big drive when things were working to go local, and now it is very difficult,” he said.
“So, we have used the auction but again, it has just tampered our cashflows so terribly that even though you know you get the preferential rates, by the time things are actually paid for, your cash flow is so hamstrung. It almost does not make it worth it.”
Kuipers said the shortages of local currency in the market are terrible, “It affects everybody,” he said.
“It not only affects us, it affects all of our customers, and the recent monetary policy of 200 percent has virtually brought some of our customers to a standstill. It has affected us very badly, but it cost us hugely in interest money that we should have been putting into capital.”
Currently, the company is running 220 trucks, but there are 10 000 registered.
“So, there is a huge market out there and, interestingly, rightly or wrongly, some other policies have levelled the playing field between us and the informal market,” he said.
He said one of the biggest ones is the fuel price and the taxes on the fuel.
“It is a major cost for the informal market, whereas in our system it is just a portion of the cost of what we do. So, we see that as a positive.”
The company has had a positive start to the year, with half-year volumes 19 percent ahead of last year and 5 percent ahead of budget.
Earnings before interest, taxes, and depreciation increased 76 percent to $396 million in the first half year of 2022 from $225 million in the comparative period.
It did not declare an interim dividend for the half year.