General Belting seeks $5m to ramp up production

04 Oct, 2015 - 01:10 0 Views
General Belting seeks $5m to ramp up production

The Sunday News

cash

HARARE — Listed conveyor belt manufacturer General Belting is seeking $5 million to ramp up production and regain market share.

The group is expecting that increased production will enable it to increase market share from about 10 percent to 50 percent by mid next year.

Group general manager Mr Wilbroad Tsuroh said that they were exploring several ways of raising the money including engaging a technical partner.

To this end, he said that they were in discussion with a number of companies on the issue.

Mr Tsuroh said that production at the company was averaging 20 percent.

“Our capacity at the moment is constantly changing because we’re doing order financing.

“At times it goes up to 60 to 70 percent and at others it can come down to 30 percent or even zero,” he said.

Mr Tsuro said of the $5 million their immediate requirement was for $2 million to $3 million to revamp some of their machinery.

“We are not looking at replacing all our equipment but we are looking at modernising and upgrading some of it such as electric motors to make them more energy efficient,” he said.

The push to increase production comes at a time when the company, which has been struggling to get back on its feet and restore confidence among its major clients mainly large mining companies, recently got a reprieve through the gazetting of Statutory Instrument 126 of 2014 that compels major buyers to source their supplies from the company.

Mr Tsuroh said that while they were grateful for the protection provided by the Statutory Instrument they were cognisant of the fact that they cannot always depend on protective legislation and as such were engaging their customers.

“We are aware that our product is slightly more expensive than the imported product but we are working to ensure that there is a reduction in inefficiencies that will result in a price reduction early next year.

During the half year period ending 30 June 2015 turnover for the company was up 47 percent from $1,5 million to $2,2 million while operating expenses declined 7 percent to $1,03 million from $1,1 million resulting in a 127 percent jump in gross profit from $268 000 to $611 000.

Market share slid from 20 percent to 10 percent and the company’s operating loss was down 52 percent from $800 000 to $400 000.

General Belting was one of the companies that accessed money under the Distressed Marginalised Areas Fund.

The company, which accessed $1 million, has since repaid $500 000, of which $300 000 was towards capital and the balance was interest. Apart from conveyor belts, the company also manufactures specialised fire, heat and oil resistant belting, specialised PVC belting, transmission belting, splicing services and belt surveys. — Bh24

Share This:

Survey


We value your opinion! Take a moment to complete our survey

This will close in 20 seconds