GENERAL Beltings Ltd has reported a 47% growth in turnover for the first five months of 2015 to May compared to the same period last year as business shows signs of improvement, the company’s management has said.
Gross margins are responding to factory throughput with the company’s performance expected to improve as the business builds confidence, MD Wilbert Tsuroh told shareholders at an annual general meeting on Wednesday.
He said the operating environment had remained harsh, forcing the company to abandon exports since 2008.
“At this moment, we are not in a position to export but we used to export about 15-20% of our production into South Africa and Botswana,” said Tsuroh.
“If you look at the devaluation of the South African rand it’s a major issue because between 2011 and now it has had more like 53% devaluation and that on its own has affected our market in a big way. Merely by the devaluation we cannot be competitive.”
Tsuroh said the group has employed a number of cost cutting initiatives such as freezing salaries for directors since 2010 and improving procurement systems.
In terms of the local market, he said, a number of players such as mines have taken the deliberate process of adopting local production. “We are currently working with Zimplats to make sure we improve our products to their needs and we are doing that with their technical department,” Tsuroh said, adding Zimplats realised the conveyor belts being manufactured by his company do not meet modern requirements such as being fire proof.
As a result, Zimplats offered technical services to improve the product.
He said capacity utilisation fluctuated between 66% and 30% depending on availability of orders and raw materials.
In the company’s last annual financials for the year to December 2014, General Beltings reported an operating loss of US$1,62 million, a 50% improvement from 2013’s US$3,37 million loss despite turnover having dropped by as much as 19% on the previous comparative period to US$3, 1 million.
At the time, Tsuroh said the company would continue to defend its markets through competitive product quality, technical back up and tailor made customer solutions underpinned with strong research and development process.