BY CHIEDZA KOWO
FOLLOWING vicious cyclones that rattled southern Africa and paralysed international cargo transportation recently, Zimbabwe Stock Exchange-listed National Tyre Services (NTS)’s Harare-bound stocks were trapped on the high seas, it emerged on Friday.
Naturally, the storms raised concerns over volumes trends for the third quarter ended December 31, 2020.
But according to company secretary Stewart Mandimika, overall volumes shook off the headwinds, climbing 28% underpinned by an aggressive marketing onslaught.
On two occasions, Mozambican harbours sunk several metres under water during the period, after floodwaters swept ashore, with Maputo ordering mass evacuations.
Tropical Cyclone Eloise tore through Mozambique on January 23, 2021, less than a month after Tropical Storm Chalane hit the coast on December 30, 2020, trapping ships offshore as harbour infrastructure came under pressure.
Mandimika said total volumes increased to 52 608 during the review period, compared to 44 067 during the second quarter.
“Movement of stock into Zimbabwe was further curtailed by cyclones that delayed berthing of ships at Beira with stocks from China and India,” Mandimika said.
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He added: “The company’s volume performance improved despite these challenges. The market experienced noticeable stockouts particularly in December 2020. Locally, critical demand for forex to import essential requirements including COVID-19 testing kits, vaccines and raw materials weighed in. COVID-19 pandemic continued to affect operations in Q3 2020/2021. South Africa recorded a new wave of coronavirus, forcing level four lockdown measures to be implemented. This resulted in serious delays of stock movement across the border. Overall, volumes for period October to December 2020 increased by 99% compared to the same period last year, despite COVID-19 challenges. Growth is attributed mainly to effective marketing initiatives and availability of stock.”
The debilitating effects of COVID-19-induced economic shutdowns and industrial stockouts is the new norm since the pandemic broke out at the end of 2019, triggering a global industrial bloodbath.
But the firm said new tyres sales increased by 213% during the period, compared to same period in 2019.
NTS said tyre re-treading volumes, which forms a bigger part of its business, increased by 21%, with its services category volumes rising 87% compared to the same period previously.
However, there is an interesting spin about NTS’ business.
The cyclones themselves could have been an answer to the business’ ambition to raise revenues.
In February, researchers at Morgan & Co said the cyclones, while devastating, had unlocked immense growth opportunities for the firm as potholes widened in Zimbabwe after heavy rains that caused rough road surfaces.
Motorists were expected to troop back to the NTS workshops as tyre punctures and bursts increased.
“Lockdown restrictions in the country have limited the movement of vehicles, with ripple effects on NTS’ business lines,” Morgan & Co said in a review of the firm’s financial results for the half-year ended September 30, 2020
“Further, the ban of old cars under the National Development Strategy One is likely to limit the flow of second-hand vehicles into the country which have been a low-hanging fruit for the business. However, the dilapidated road infrastructure, which has been worsened by the rains throughout the country, will continue to support NTS’ business case,” Morgan & Co added.
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