Allied targets return to breakeven, profitability
STATE owned timber producer and processor, Allied Timbers, anticipates a return to profitability next year, the first time in nearly 10 years. However it must first achieve its target to break-even this year.
Chief executive Daniel Sithole said current numbers show significant improvement in operations while the company has a full order book, which it is struggling to fulfil due to serious capacity limitations stemming from lack of equipment. Currently, Allied Timbers is exporting to SADC including Zambia, Mozambique and Botswana while orders have also started coming from overseas. Dr Sithole said the company was on a firm recovery path in terms of attaining profitability, following years of resource plunder, which resulted in faults and breakdown of several saw mills, harvesting, transportation and fire guard equipment.
“Profitability has improved, but its a process. However, the company has reached the bottom of its meltdown and the growth trajectory is good, we are anticipating to attain breakeven this year and profitability from next year,” he said. “I think the company last made profits nearly 10 years ago because of pilferage.”
Part of the extensive leakages that haemorrhaged the company over a period of time were also made possible by numerous contractors, totalling 71, which were hired by previous management, making monitoring and accountability difficult. A forensic audit, which took 22 months and done by KPMG, has been completed and is reportedly now with Environment, Water and Climate Minister Oppah Mchinguri who must present the findings to Cabinet for it is publicised. It is expected the report captured prejudice the firm suffered over years.
Dr Sithole said a recovery plan, focusing on possibility of public private partnerships, build operate and transfer and fresh capital injection had been completed. He said Allied directors convinced Government of the need to preserve Zimbabwe’s strategic timber forestry, 60 percent of which falls under Allied. Zimbabwe, the only SADC country exporting roofing timber, has 39 million hectares, with just about 200 000ha of its total land having climate and terrain suitable for timber production. South Africa produces a lot of timber, but all is consumed locally.
With significant housing projects going on across the country, the current situation means Zimbabwe, which is battling a choking foreign currency crisis, faced unpleasant prospect of having to import timber to met local demand in the near future. Allied Timbers is racing against time to replenish its commercial forestry and plans to plant 6 000 ha each year for the next 10 years, amid revelations previous management concentrated on harvesting, which has put Zimbabwe at risk of running out of timber in seven years, if nothing is done to regenerate timber plantations.
This also saw the company being included under the $120 million to $150 million Belarus equipment facility. Under the facility, companies from Belarus will supply mining, farming and road construction equipment, including tractors and dump trucks, while the companies will also build service centres in the country.
The State owned timber company specialises in sawn timber, poles, and various added timber-based products such as doors, flooring timber and blackboards.–herald
