Cable manufacturer, CAFCA Limited says margins in the four months to January 2017 are two percent below the prior year as a result of pressure from cheaper imports.
Group managing director Rob Webster told shareholders at the company’s annual general meeting that the company is engaged with government in seeking protection from imports threatening its viability.
“Government has their position and we have our own but we just need protection that stops cables coming in the country. We cannot compete with the Chinese or Indians but that is not justification to allow import cables in the country since we have the capacity,” he said.
Webster said the company is at the moment producing 200 tonnes per month and has the capacity to increase that if the industry is protected.
Meanwhile, during the period, volumes and turnover are 6 percent and 10 percent below prior year respectively.
He said as a result of a cost cutting initiative conducted last year, profit is up 65 percent year on year and is likely to maintain the same level at half year in March.
Webster said the company has $2.2 million cash sitting in the bank.
“In tandem with the current environment we are converting cash to stocks, but the company is unable convert the US dollars to buy raw materials,” he said.
“Foreign currency will be our biggest challenge. On raw materials, we are fine until February end and we expect a stock out in March since our suppliers have not yet been paid,” he said.
Webster said exports were generating at least $750 000 a month.-The Source