BORDER Timbers International says due to the significant decrease in prices in the United States market it has had to materially alter the basis on which it operates.
In its unaudited results for the period ended December 31 Border, the holding company, said an improved product mix had meant greater flexibility which had been critical to maintaining the company’s position in its primary markets.
“Production of French doors has improved over the past six months with the major constraint remaining consistent and competitive in the supply of glass,” the company said. “As in every other part of the operation costs have spiralled out of all proportion with the company’s ability to improve the revenue flow.”
Border said at the Paulington factory performance was well in the last six months with production units of multi-ply and sliced veneer exceeding targets.
“Blockboard and thin ply production was however below set targets mainly because of inadequate and erratic supply of peeler logs,” the company said. “The peeler log supply problem will continue to disrupt the factory for as long as the plantations remain short of trees.”
It said the market remained steady despite the strong South African rand, which rendered the South African competitors unable to export their products.
As at December 31 Radar spent $1,7 billion on replacing equipment and other capital assets.
A further $1,1 billion was spent on plantations with a further $4 billion approved but not yet committed as funding for other projects.
“The transfer of manufacturing capacity from countries like the US to soft currency regions – be they Chile, Brazil or southern Africa – are based on the premise of aggressively competitive pricing,” Radar said. “It has become increasingly apparent that the rationale to export does not exist,” the company said in its results.
Listed on the Zimbabwe Stock Exchange Border is the country’s largest supplier of timber products.
It has a market capitalisation of $54 billion.