Turnall Holdings Limited, a key player in Zimbabwe’s construction and allied industry, has announced plans to diversify away from asbestos following bans by South Africa and Mozambique, its largest traditional export markets.
Traditionally, the industrial-conglomerate is involved in the production of asbestos products, fibre cement proofing, piping and accessories.
In its half-year financial statement, chairman Herbert Nkala said Turnall would open an asbestos-free plant as early as January next year to re-enter regional export markets and shore up the volume of exports to previous levels.
The project would see the company offering a diversified range of non-asbestos products to the domestic and regional markets.
In line with this, the company has revived operations at its pipe plant, which had been defunct for two years.
“The company embarked on a capital project to install an asbestos-free plant after asbestos was banned by South Africa in July 2008,” Nkala said.
“The project, which is at an advanced stage in time for commissioning in December 2010, will see the company re-enter the lucrative South African housing construction market as January 2011,”
“The strategy will see the company aggressively pursue regional market developments by offering the full range of non-asbestos products.
The company is confident that exports will grow from the current 5% to about 20% on the back of an existing export firm order book.”
For of 2010, Turnall reported that revenue rose 245,98% to $13,5 million from the comparable period last year. Exports contributed 3,5% to the total revenue.
The company’s profits from continuing operations surged 47,2% to $1,4 million from $1 million realised during the comparative period.
However, the operating margin decreased to 11% from 26% during the same period last year due to high costs of importing fibre.
To mitigate the cost shock, Turnall increased prices in May and June.
The company closed the review with total assets valued at $37,2 million against total liabilities of $15,6 million.
Net cash resources amounted to $866 22 while short-term loans and borrowings amounted to $940 282. Long-term borrowings were at $1,1 million.
“Finance charges were incurred on short term borrowings secured to fund working capital as well as long term borrowing for the non-asbestos capital project,” said Nkala.