Asbestos manufacturer Turnall Holdings Limited has begun supplying products worth R15 million to South Africa, as it taps into its expanding housing projects, and also as part of efforts to establish a strong foothold on regional markets.
Turnall’s board chairman, Herbert Nkala said the firm this year kicked off on a positive note with plant capacity utilitisation remaining relatively high at 75% in the first two months.
However, it is the export market that excites the firm. “Growth in export volumes is also anticipated from regional markets given the number of projects that are underway in South Africa and elsewhere in the region,” said Nkala in a statement accompanying Turnall’s full financial results for the year ended December 2011.
“The company is excited about the prospect of growing exports into the region during 2012. “We continue to target the South African Rural Development Programme (RDP) housing projects and to date we have made in-roads into this segment,” he said.
Nkala said supplies into a 6 500 housing unit project valued at R15m in KwaZulu Natal started in January.
During the year under review, Turnall’s operating profit increased by 5,4% to $5,1 million.
At the end of the year, net borrowings stood at $11,8 million comprising $9,3 million secured largely for purchasing chyrsolite asbestos from Brazil and Russia and $2,5 million representing a portion of the Preferential Trade Area loan.
The company achieved a turnover of $51,9 million from continuing operations which were up 48,8% from the previous year.
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Nkala expressed optimism local infrastructural development plans would sustain growth in pipe sales and help diversify financial streams outside building projects. He said the unavailability of chrysolite fibre on the local market as a result of mine closures strained operations as it forced the company to import from Brazil and Russia at a landed cost of $1 300 per tonne.
The price is almost double what the local mines would charge, Nkala said.
“Secondly, the company was forced to maintain high fibre stockholding levels in order to deal with the long lead times.
“The company as a result kept two to three months stockholding of fibre and in the process ties cash resources in fibre stock,” said Nkala.
Volumes at 83 910 tonnes grew 23%, while export volumes were up 18%.
