The Sunday News
Dumisani Nsingo, Senior Business Reporter
THE proliferation of imported goods and negative perception of locally manufactured products by some customers continues to hurt the country’s sole manufacturer of conveyor belts, General Beltings Holdings’ prospects of turning around its fortunes.
General Beltings general manager Mr Joseph Gunda said the introduction of a number of import restrictions by the Government over the years has, however, played a part in marginally improving the company’s productivity and profitability levels.
“An improvement in business operations for the Rubber Division of General Beltings has certainly been observed following implementation of SI (Statutory Instrument) 126 of 2014 and SI 64 of 2016 as evidenced by an increase in volumes which went up 153 percent while revenue went up 57 percent in the first quarter of 2017.
“This improvement has consequently contributed to the company’s revenue in the first quarter going up 20 percent on prior comparable period although overall total volume was static at 365 tonnes. This improvement is coming from a very low base hence it has not been enough to make a significant impact on business profitability,” said Mr Gunda.
He, however, said that despite the introduction of import restrictions products were still finding their way into the country.
“Volumes are still below break-even levels due to imports of conveyor belts that are still finding their way into the country despite the existence of the SIs. Some of our customers are still resisting buying locally produced belts as they have not procured from us in a long time but the majority are gradually embracing the local procurement policy drive,” said Mr Gunda.
The Government and other stakeholders have been promoting the Buy Zimbabwe campaign since 2011 in an effort to unlock the country’s economic potential through aggressive support of the production and consumption of local goods and services.
The Government is also working on enacting the Public Procurement and Disposal of Public Asset Policy which seeks to promote the local procurement of goods as well as curbing underhand dealings in the acquisition of assets by the Government and its various departments.
Mr Gunda said the company’s capacity utilisation had been hovering between 15 and 42 percent since the beginning of the year largely due to erratic supply of raw materials as a result of foreign currency shortages.
“It is our plea that General Beltings be given preference by the Government on the allocation of foreign currency for importation of key raw materials in order for the company to exploit its full potential in supplying and satisfying both the domestic and export markets. With all the necessary support, General Beltings could easily be used as a typical test case of a success story of how Government intervention can help revive struggling industries,” he said.
The company is also dogged by litigations from statutory bodies over legacy and current debts as well as high costs of borrowing that are negatively impacting on margins and business profitability. Mr Gunda said the company can play a pivotal role in improving production in the mining sector.
“General Beltings is a key supplier to Zimbabwe’s mining sector which is currently driving the economy. As the sole manufacturers of conveyor belts in Zimbabwe, the company is ready to efficiently service its market and re-establish itself as the regional giant in conveyor belt and rubber related products manufacturing,” he said.
General Beltings used to export into the region to Botswana, South Africa, Malawi and Zambia.
“While efforts are being made to revive the export business, it is always prudent to satisfy the domestic market first especially where import restrictions exists for local companies not to import locally manufactured goods, then raise your production levels to utilise excess capacity on exports. We expect that we will be able to start exporting once we have built up sufficient strength in our supply chain to be able to constantly meet requirements of the market,” Mr Gunda said.
@DNsingo
