General Belting's turnover up 47%

General Belting's turnover up 47%
Published: 24 June 2015
Listed conveyor belts maker General Beltings has recorded a 47 percent upturn in turnover for the first five month of the year, on the back of a Government initiative last year to protect a number of local industries.

In October last year, the Government tightened the screws on the importation of a number of products - including rubber products - through the promulgation of Statutory Instrument number 126 of 2014 (Control of Goods {Open General Import Licence No.2} Amendment notice No 3).

General Beltings group managing director Mr Wilbroad Tsuroh said today that the Government initiative has started bearing fruits for the company.

"There are two major factors (for the improved performance). The first factor is the demand that has been channeled towards our factory from the mining sector, and this has been in response the initiative put by Government where they deliberately stated that they were going to protect the fragile local manufacturing sector .

"For our own sector they put in a Statutory Instrument 126 of 2014 which was aimed at protecting the rubber industry. Both ourselves as the manufacturers and the customers have responded positively even if not to the extent that we would want," he said.

This was after telling shareholders at the company's 12th annual general meeting this afternoon that revenue for the year to end of May had gone up by 47 percent.

"We have seen some improvement in terms of performance. Of note is the fact that on a year to date basis – up to end of May – we have seen a 47 percent increase in turnover compared to the prior year, we have also seen the business responding in terms of gross margin were we have moved from a gross margin same time last year of 22 percent and current year we are at 27 percent," said Mr Tsuroh.

The MD however urged Government to further enforce strict monitoring at the country's borders. But Mr Tsuroh also partly attributed the improved performance to enhanced access to finance.

"But there has also been support that we have received from our banking partners who have stepped in and assisted in financing of our production processes," he said.

"Initially we benefited, from DIMAF, but that had its limitations, but then we put our business case across to our bankers, partially with the coming of the Statutory Instrument our bankers agreed to give us financing facility so that we are able to take advantage of the opportunities created by the Statutory Instrument.

"You can imagine we are starting from a position were capacity utilisation had gone down to as low as 10 percent, so obviously our financial muscle was very limited and it took a very understanding bank to finance us."

General Beltings expects the positive trend to continue into the second half, even as the firm works to improve its internal systems.

"We are getting around to resolve our own endogenous problems, like our factory, sourcing of raw materials and we are also getting confidence from our major customers who have been using our products over the last six months in particular under the trial regime.

"There is still a lot of work to be done. We see gaps in terms of performance on our own part with regard to technical innovations that we have to put in place in order to update our product portfolio to meet the modern requirements of some of our customers . For example some of our customers have required that out belts have specific characteristics, including embedded technology that would enable them to monitor the conveyor belts remotely for safety and protection of their investments," said Mr Tsuroh.

The mining sector typically constitutes the largest proportion of General Beltings' business, and management says it currently working on huge contract with giant platinum producer, Zimbabwe Platinum Holdings.
- bh24

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