In a statement attached to its full year results to October 31 2011, Apex chairman Farai Rwodzi said the board took a decision to stop operations after selling off Marondera foundry and Philpot and Collins last year, while McMeekan foundry and Precision Grinders were sold this year.
“A detailed review of operations was conducted which led to the conclusion that the existing business model was not viable and outdated,” he said.
The foundries and engineering group has in the past disposed of its non-performing business units to clear the contingent liabilities of US$10 million.
The group said the cost of buying new equipment for the remaining business units would not have justified the potential returns in the current economic environment given that the group was at the same time under pressure from its creditors.
Group turnover totalled US$11,9 million buoyed by a US$11,6 million contribution from Phoenix Consolidated Industries but the group recorded an operating loss of US$975 000 given the high operational costs in its existing business units.
But Phoenix posted a trading profit of US$904 000 and this translated to retained earnings of US$148 000.
Apex’s performance in the regional markets was severely affected by the high production cost, rendering its pricing uncompetitive compared to major regional and international producers.
Locally, demand for the company’s products had remained subdued due to the lack of activity in the mining sector which was the major consumer of its foundry products. But the company has failed to recover given the increased activity in the mining sector.
The company said it concluded the sale of Supersonic property in Bulawayo and the disposal of All Metal Foundries in Bulawayo was at an advanced stage.
In the prior financial year, the group disposed of Marondera foundry and Philport and Collins and was also selling all its buildings and properties.
“The Zimcast and McMeekan properties are in the hands of property consultants,” Rwodzi said.
Apex also holds a controlling stake in Phoenix and shareholding in Gullivers Consolidated and the group will hold its shareholding in these companies, the company said.
Going forward the company indicated that it will continue to review its available options to unlock shareholder value.