General Beltings says it is developing markets for exports into the region to secure foreign currency to fund imports requirements, a company official said.
By Melody Chikono
This comes after the company stopped exporting into the region (Botswana, South Africa, Malawi and Zambia) at the height of economic turmoil and hyperinflation in the country a decade ago.
Managing director Wilboard Tsuroh told businessdigest on the sidelines of the company’s annual general meeting on Tuesday that it was still constrained in terms of raw materials which are not sufficient to sustain operations, adding exports would help generate foreign currency.
He said the company was getting at least 40 tonnes of raw materials per month which would only cover two weeks against requirements of 120 tonnes.
While General Beltings requires about US$300 000 monthly to import raw materials, the company had been getting an average monthly allocation of US$118 000, management said.
Tsuroh said the company, which had never had any capital injection, was depending sorely on the central bank’s foreign currency allocation.
“We are not in a position to export yet, but we are trying to see how we can regain our lost market share in the region.
At the moment, we are relying on forex allocation from RBZ. It has been a challenge but we are trying to use what we have.
On raw material, we received a consignment of 40 tonnes which will last up to two weeks. Ideally, we require up to 120 tonnes per month but if we are lucky we get 80 tonnes. Basically, it means we might have two weeks of raw material cover and sometimes nothing at all in stock,” he said.
Tsuro also said the business was still facing a challenge from imported substitutes especially from China.
In the five months to May 2018, both volumes and revenue at General Beltings and its subsidiary Cernol Chemicals went up 27% as the company managed to reach break- even point from a loss making position over the years.