National Tyre Services on recovery path — Makoni

NATIONAL Tyre Services (NTS) capacity utilisation is now averaging 60% from below 30% last August due to increased production, the firm’s chief operating officer Cleophas Makoni has said.

Makoni told analysts and journalists at the company Annual General Meeting  last week that at peak, the firm’s capacity utilisation was at 75%.
The group has opened branches in Masvingo and Gweru and is expected to open another one before year-end, to bring the branches to eight.
“We have been rolling out (new branches) since the economy was officially dollarised and we have enough stocks and payment is no longer an issue (as customers now pay in a stable currency),” Makoni said. “There are a lot of business merits in opening new branches.”
At its peak, NTS had 16 branches nationwide, but closed 12 owing to the economic meltdown in 2008.
Makoni said with the company beginning to turn around its fortunes, it intends to reopen more closed branches.
NTS is a manufacturer of retreated tyre, tread rubber, rubber moulded products, distributors of Dunlop and major brands, including sole agency for Yokohama tyres, suppliers of accessories for motor vehicles as well as tyre fitting/wheel alignment services.
Makoni said NTS was 13% ahead on budget and was on course to meet the US$9 million year end turnover forecast.
“We have chosen to drive volumes rather than margins and had banked on an expanded branch network,” he said
Tyre units in the four months to July was 15 000 against a targeted 33 000 during the financial year ending December 2010.
Makoni said they were facing competition not only from the region but from as far as China.
Last month, the Labour Court dismissed an application by NTS workers who were challenging the decision by their employer to rescind an earlier decision to retrench them.
NTS abandoned its decision to lay off 115 employees upon realising that it would cost them more in retrenchment packages than to retain them.
The employees wanted the court to confirm their retrenchment, which apparently had been shelved by the employer.
In his judgment, Labour Court President Godfrey Musariri said it was the employer’s prerogative to retrench or not to.
“Applicants (employees) disagree with the observation that respondent (NTS) had the option to keep them on their payroll,” Musariri said. “Their position was that once the Minister of Labour and Social Welfare approved their proposed retrenchment, NTS had no choice but to pay them the retrenchment packages. I disagree as evidently appears from my observations in question. The minister does not do the retrenchment. It is proposed by the employer, approved by the minister and then done by the employer.”

 

Paul Nyakazeya

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