General Beltings defies Covid-19
ZIMBABWE Stock Exchange (ZSE) listed rubber and chemical products manufacturer, General Beltings, says volumes in the quarter to September 31, 2021 surged across all divisions despite the disruption of logistics for raw materials induced by the Covid-19 pandemic and the violent riots in South Africa earlier this year.
Patrick Munyayi, the company’s finance director, said the impact of the pandemic during the quarter, the violent riots in South Africa and the subsequent cyber-attack all conspired in the disruption of logistical flows of raw materials resulting in reduced consumption of the company’s products.
“Volumes for both divisions were 31 percent and 48 percent ahead of the same period prior year for the chemicals and rubber division respectively with both divisions operating profitably,” he said in a trading update.
However, he noted that margins were under severe pressure due to the strengthening of the South African rand against the United States dollar which resulted in increased raw materials costs.
“In addition, rapid dollarisation in the economy and the consequent basing of local costs on unofficial rates further reduced profitability when compared with the same period prior year,” Munyayi said.
He said during the period under review, expanded vaccination programmes and their acceptance by the general populace brought respite to the economy as the rate of infection declined while at the same time there were significant gains towards achieving herd immunity.
Munyayi said the development is expected to result in relaxed lockdown measures which would impact positively on aggregate demand as other key markets of the company which include hospitality and schools open up.
“Given the above the company is expected to operate profitably for the rest of the year although at reduced levels when compared with prior year and budget,” he said.
He noted that the chemicals division was expected to recover from the effect of lockdown measures which shut off its traditional markets.
He added that the rubber division is expected to maintain its recovery path and it’s out turn will depend on improved logistical flow of raw materials following the intermittent disruptions at the raw materials suppliers factories.
General Beltings’ rubber segment is involved in the production and marketing of rubber and conveyor belting products.
The chemical segment is in the manufacturing, importation, and distribution of chemical-related products. The company generates maximum revenue through the sale of its chemical products.
The company manufactures and distributes general-purpose and specialised textile reinforced conveyor belts with its products ranging from rubber-covered belting, polyvinyl chloride (PVC) belting and light-duty PVC belting.-ebusinessweekly
