Business / Local
Turnall to open plant in Bulawayo
27 May 2013 at 03:22hrs | Views
Asbestos products manufacturer Turnall Holdings last week said low product demand in the first four months of the year resulted in a 10 percent slump in turnover compared to the same period last year.
Turnall achieved an income of US$11,3 million against US$12,5 million for last year as volumes declined by16 percent to 19 448 tonnes.
Managing director Mr John Jere said the decline in demand forced them to slow down on product manufacturing.
"Capacity utilisation fell as a result and our factories were operating at about 40 percent capacity in an effort to align factory activity levels with demand patterns," he said.
He added that the performance, which was below expectation, was likely to weigh down the company's profits for the first half of the year.
The company's profitability has already been weighed down by continued unavailability of its main raw material, chrysotile fibre, used in the production of asbestos on the local market.
The company has had to resort to importation of the raw material from Brazil and Russia following the closure of Shabanie-Mashava Mines.
Mr Jere, however, said sales had begun to pick up this month, expressing confidence that the trend would be maintained in the second half of the year.
"It is, however, important to highlight though that first quarter performance is normally subdued given the seasonality nature of our business cycle and April performance and May performance already have given us the confidence that these negative trends will be reversed in the coming months," he said.
Meanwhile, Mr Jere said the company was on target to open its new concrete tile plant in Bulawayo next month.
"Products are going to be on the market in July," he said.
"The plant, which was acquired from Italy at a cost of US$2,5 million, is expected to improve production and the company's product range.
The machine has the capacity to produce between 45 000 and 50 000 tiles per day.
Turnall achieved an income of US$11,3 million against US$12,5 million for last year as volumes declined by16 percent to 19 448 tonnes.
Managing director Mr John Jere said the decline in demand forced them to slow down on product manufacturing.
"Capacity utilisation fell as a result and our factories were operating at about 40 percent capacity in an effort to align factory activity levels with demand patterns," he said.
He added that the performance, which was below expectation, was likely to weigh down the company's profits for the first half of the year.
The company's profitability has already been weighed down by continued unavailability of its main raw material, chrysotile fibre, used in the production of asbestos on the local market.
Mr Jere, however, said sales had begun to pick up this month, expressing confidence that the trend would be maintained in the second half of the year.
"It is, however, important to highlight though that first quarter performance is normally subdued given the seasonality nature of our business cycle and April performance and May performance already have given us the confidence that these negative trends will be reversed in the coming months," he said.
Meanwhile, Mr Jere said the company was on target to open its new concrete tile plant in Bulawayo next month.
"Products are going to be on the market in July," he said.
"The plant, which was acquired from Italy at a cost of US$2,5 million, is expected to improve production and the company's product range.
The machine has the capacity to produce between 45 000 and 50 000 tiles per day.
Source - New Ziana.
