General Beltings seeks to consolidate market position

Source: NewsDay Zimbabwe
Author: Melody Chikono

ZIMBABWE Stock Exchange-listed General Beltings (GB) expects to consolidate its market position in the energy and cement manufacturing sectors in response to the impact of geo-political conflicts and El Niño-induced drought.

In a statement accompanying financial results for the financial year 2023, GB chairperson Godfrey Nhemachena said Cernol Chemicals was also expected to consolidate its traditional market recovery as new models of hospitality offerings evolve.

"The company expects to consolidate its market position in the energy and cement manufacturing sectors in addition to the other non-platinum group minerals as envisaged in the National Development Strategy 1 which is underpinned by the growth in the mining sector," he said.

"Cernol Chemicals is expected to consolidate its efforts in traditional market recovery as new models of hospitality offerings evolve. Existing and new strategic partners being pursued are expected to strengthen market positioning in new market niches."

Nhemachena said the geopolitical conflicts in Europe and the Middle East will continue to impact on demand patterns of mineral commodities in the short to medium term as there were no signs of cessation to the conflicts.

Due to geopolitical tensions, mineral reserves will flood the markets and depress demand for minerals that Zimbabwe would ordinarily supply.

This, according to him, will force local mines to curtail production or mothball operations.

"These developments would in turn negatively affect the company's downstream demand.

Despite the depressed demand in the economy, the group saw total volumes at 921 tonnes, 2,5% shy of the prior year's 944 tonnes due to improved throughput at GB division.

"Cernol Chemicals market recovery efforts yielded a lower than expected outcome with volumes marginally lower than the prior year," Nhemachena said.

"Although price competition intensified in the year, total turnover at ZWL$29 billion increased by 99% when compared with prior year's ZWL$15 billion due to sustained volumes from prior year at General Beltings and a favourable market mix at Cernol Chemicals.

"Owing to the USD imported inflation and a deteriorating exchange rate in an increasingly dollarised environment, the gross profit at ZWL$11 billion was 38% higher than the prior year's ZWL$8 billion."

The company benefited from improved internal process efficiencies, which arose from scheduled plant maintenance and refurbishment. Operating costs rose by 150% to ZWL$15 billion in the prior year due to the effects of inflation and dollarised quasi institution costs.

Operating profit declined by 150% to sit at ZWL$2 billion on the back of increased dollarisation and inflationary pressure.