General Beltings sees spinoffs out of bloody conflict

General Beltings chairperson Godfrey Nhemachena

GENERAL Beltings (GB), the firm that produces industrial rubbers and chemicals, says it plans to consolidate its market position to unlock opportunities stemming out of global logistical gridlocks triggered by the Russia invasion of Ukraine.

The two-month conflict continues unabated with no sign of a ceasefire.

But it has had devastating effects beyond the conflict zones as bombardment continued across Ukraine this week.

A surge in global food and oil prices, including at markets in far-flung jurisdictions like Zimbabwe, has epitomised the deep impact that the bloody conflict has had on the global economy.

Rocketing fuel and commodity prices, along with supply chain disruptions, have stifled raw material shipments not only to Zimbabwe, but across global markets, leaving economies already frustrated by pandemic-induced headwinds in a precarious state.

GB said should the war further unsettle supply chains, domestic markets would be forced to turn to local suppliers for their raw material requirements, which requires it to prepare for the boom that might sweep through Zimbabwe even if the conflict ends earlier than expected.

“The optimism that emerged following the mitigation of the COVID-19 pandemic scourge has quickly faded given the Russia/Ukraine conflict that threatens to plunge the world into chaos, particularly the sources of primary raw materials,” GB chairperson Godfrey Nhemachena said in a commentary to the firm’s financial statements for the year ended December 31, 2021.

“General Beltings is expected to increase its market consolidation as the anticipated logistical constraints emanating from the conflict will compel its existing customers to replace imports with locally-produced products. Recent increases in fuels and natural gas prices signal more severe measures that will inevitably constrain logistical supply chains and thereby dislocate the growth trajectories of the global economy,” Nhemachena added.

“In view of the relaxation of COVID-19 measures and improved mining activity, GB Holdings Limited is expected to benefit from increased mining activity and customer penetration. Cernol Chemicals will strive to reassert its market position as the COVID-19 regulations are relaxed. Given the recent labour mobility trends, the company will further invest in key skills retention and development to ensure improved performance in the year 2022,” he said.

However, even in the absence of disruptions to international freightliners sailing out of major ports, shipment costs have rocketed since 2020, when the pandemic forced governments to apply hard lockdowns that reduced global fleets.

Freight costs have rocketed to about US$24 000 per container on distances that cost US$4 000 before the COVID-19 outbreak.

Experts say these factors will force under-fire domestic firms to return to local suppliers for their requirements.

GB’s inflation-adjusted turnover increased by 7% to $575 million during the period, from $537 million during the comparable period in 2020.

The firm suffered a profit-after-tax loss of $11,7 million during the period, compared to a $68,1 million profit previously.

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