Turnall turns to domestic market
Listed roofing products manufacturer, Turnall Holdings, says it will focus on serving the domestic market as its exports continue to under-perform.
The group’s exports into the region have been hit by national lockdowns that countries have been imposing to curb the spread of the Covid-19 virus, which emerged at the end of 2019. To date over 3 million deaths have been recorded from countries across the globe, according to World Health Organisation (WHO) data. In a Q1 trading update, Turnall chairman Bothwell Nyajeka said exports slowed over the three-month period under review.
“Turnall’s exports slowed, largely as a result of regional lockdowns and consequent logistics disruptions. The group is focusing on satisfying local demand and will resume exports once the situation improves in the regional market,” he said.
The weakening exports trend has continued from the group’s performance last year. For FY2020, Turnall’s export volumes were 43 percent lower than the previous year as they were affected by border closures, international cargo logistics constraints and lack of competitiveness in the regional markets.
Overall volumes were however slightly improved as the group saw improved capacity utilisation from the prior comparable period.
“Group sales volumes marginally increased by 1 percent over the same period last year despite the two months lockdown in the period under review.
“Building products, concrete and AC pipes contributed 51 percent, 48 percent and 1 percent of the volumes, respectively,” said the chairman.
“Building products have declined by 21 percent compared to last year same period whilst concrete products increased by 43 percent for the period under review. Capacity utilisation improved to 60 percent compared to 57 percent same period regardless of the effects of Covid-19.”
The group expects performance to improve in the present and next quarters.
“The group projects a better Q2 performance than Q1, anchored on a continued volume growth trajectory and cost containment.
“Volumes are expected to grow further in the third and fourth quarter on the back of production efficiencies, aggressive sales strategy leveraging on a re-modelled route to market.”
Meanwhile, management has indicated that the National Social Security Authority (NSSA) has conducted a tender process for parties that expressed an interest in acquiring its shareholding in the roofing material manufacturer.
The State pensions authority is the largest shareholder in Turnall with a 32,5 percent stake in the Zimbabwe Stock Exchange-listed company.
Demand for building materials locally surges during the peak of the construction season that runs from April to November.-herald.clz.w
