adminCONVEYOR belt manufacturer General Beltings Holdings has failed to return to profitability despite accessing $1 million from the Distressed and Marginalised Areas Fund (Dimaf) to boost its operations. The Zimbabwe Stock Exchange (ZSE) listed company said its situation worsened after it posted a $727 767 loss for the half year ended June 2013, up from $616 009 in the comparable period last year.
The company’s chairman, Mr Godfrey Nhemachena, said the company was still on the hunt for more funding.
“Fund raising initiatives will continue in the second half in an effort to improve the company’s market positioning and competitiveness,” he said.
“Due to low levels of investment in plant and machinery since dollarisation, the sought funds will be applied towards additional working capital and plant optimisation.”
Mr Nhemachena said the $1 million Dimaf funding had been used to procure raw materials. Dimaf is a revolving fund which the government set up to assist struggling companies especially those outside Harare.
The fund provides access at lower interest rates and a relatively longer tenure compared to those offered by commercial banks.
“The accessing of cheaper Dimaf funds resulted in savings in the costs of funds,” Mr Nhemachena said.
He said lack of funding had resulted in a 30 percent slump in volumes to 447 metric tonnes as capacity utilisation averaged 15 percent. Total revenue also dropped to $2 million from $2,9 million in the comparable period.
Mr Nhemachena said access to more funding would improve accessibility of the group’s products as demand from players in the agriculture and mining sectors was expected to go up.
“Although competition from imports will be inevitable, the company believes that with the appropriate funding it can fend off competition through competitive pricing, product and adequate technical support,” he said.
General Beltings is the sole manufacturer of conveyor belting in Zimbabwe and exports some of its products to Botswana, Zambia, Malawi, South Africa, Ghana, Tanzania and Namibia. – New Ziana.
Online Reporter