Allied Timbers appoints acting chief executive

Allied Timbers (Pvt) Ltd has appointed Mr Trymore Chivinge as acting chief executive officer taking over from Remigio Nenzou who is fighting corruption allegations in the courts.

Mr Nenzou, who was the acting chief executive officer, was arrested by the Zimbabwe Anti-Corruption Commission (ZAAC) last month on allegations of contravening Section 174 (1) (a) of the Criminal Law (Codification and Reform) Act, Cap:23.

The allegations stem from his role in the purchase of a sawmill in Germany without going to tender as per Government’s procurement laws.

The resolution to replace Nenzou was passed at a special board meeting of the timber producer which was convened on 1 December this year.

“It was resolved that Mr Trymore Chivinge be appointed acting chief executive officer with immediate effect until this resolution is revised by the board, or until the confirmation of a substantive chief executive officer by the Minister,” reads the firm’s board resolutions which were signed off by the board chair and the company’s corporate secretary.

It was also resolved that, “appointment of Mr Nenzou as acting CEO be rescinded until a further decision is made by the board.”

The board also resolved that the company institutes an internal audit on the purchase of the sawmill and produce a report for the board’s consideration.

Allied is a State-owned company with estates in Manicaland, Midlands and Matabeleland provinces. The company was formed in 2003 as part of the unbundling of the Forestry Commission meant to separate regulatory activities from commercial activities.

Having initially struggled for viability, it has been targeted for growth in the second republic and earlier in this year, it announced that production capacity has been expanded from as low as 10 percent to around 50 percent after the company re-hired saw millers. The millers had been laid off 2016.

According to the timber company results published recently, the firm shifted from a loss-making position of $88,51 million in 2019 to post a net profit before tax of $70,49 million for the three months to September 30 2020.

The improved profitability was attributable to easing inflationary pressures.

Said Border Timbers judicial manager Mr Peter Bailey: “The economic environment has been fairly stabilising since the introduction of the foreign currency auction system and this has seen some improvements in the macro-economic fundamentals.

“Generally, global economies experienced the devastating effects of Covid-19 pandemic, which resulted in lockdown measures, which affected both our local and export markets.”

But the group’s numbers in other key areas remained depressed.

Border Timbers’ revenue for the quarter under review slipped to $313,14 million from $371,86 million in the same period last year, which management attributed to a dip in sales volumes to 16 707 cubic metres from 18 973 cubic metres in the prior comparative period.

Critically, production volumes went down by 24 percent to 13 668 cubic metres for the period under review from 17 986 cubic metres in the comparative 2019 period.

With regards to transmission poles and lumber, production volumes slumped to 2 130 and 11 539 cubic metres, from a 2019 comparative of 2 621 and 15 365 cubic metres, respectively.

Bailey is, however, optimistic that business will tick up going forward as demand is still high for the company’s products.

He is, however, less optimistic on the company coming out of judicial management.

“Discussions with the government will follow. Accordingly, the company will remain under judicial management for the foreseeable future,” he said.

The company was placed under provisional judicial management in January 2015 and went into final judicial management in April 2016 after failing to service debts to several financial institutions.

Border Timbers’ exit from judicial management was anticipated this year, but mainly depending on the settlement of an ongoing dispute with creditors over US$125 million awarded to the company by the International Centre for Settlement of Investment Disputes (ICSID).-herald.cl.zw