Listed roofing and building materials producer, Turnall Holdings says its operating expenses have shot up following the closure of the country’s sole asbestos producer, Shabanie and Mashaba Mines (SMM) and is now spending about $8 million annually to import raw material.
SMM, which had mines in Zvishavane and Mashava, ground to a halt in 2008, three years after the government seized them from Mutumwa Mawere, under a controversial “reconstruction” law that allowed the state to take over assets of businesses deemed to be insolvent and incapable of servicing loans and charges owed to state institutions and agencies.
Turnall technical director Francis Chigwedere said that his company was now importing fibre used in the production of pressure pipes from Brazil and Russia.
“We’re spending about $8 million a year to import the fibre that we require in the production of pressure pipes and roofing sheets. We used to get the raw material from Shabanie and Mashaba mines at relatively low price before they closed few years ago,” he said.
He said the pipe plant at the Bulawayo factory that was closed a year ago due to depressed demand on the local market was re-opened at the beginning of this month after securing $2 million worth of projects with a national significance.
Currently, Turnall is supplying pipes to projects such as the Harare Water Maintenance project, Nkayi Rural District Council, Masvingo Trunk Sewer project and the Victoria Falls Pipeline project.
As a result of the re-opening of the pipe plant, 200 more jobs have been added at the Bulawayo factory, which now employs 400 workers, he said.
The factory’s capacity utilisation has also improved from 40 percent before the resumption of production at the plant to 55 percent.
Chigwedere said the company had not been spared from the working capital constraints facing other companies in the country.
“We’re also struggling just like any other company. We are engaging financial institutions to see whether we can get cheap loans. Due to working capital constraints, we have also changed from a credit model to cash model so that we get the cash instantly as we sell our products,” he said.-The Source
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