adminConveyor belt manufacturer General Beltings Holdings said on Tuesday it failed to return to profitability despite accessing US$1 million from the Distressed and Marginalised Areas Fund to boost its operations.
The Zimbabwe Stock Exchange-listed company said its situation worsened after it posted a US$727 767 loss for the half-year ended June 30 2013, up from US$616 009 in the comparable period last year.
GBH chairman Mr Godfrey Nhemachena said the company was still in 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, without specifying how much the company required.
“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 US$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.
Mr Nhemachena 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 US$2 million from US$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. – New Ziana.
Online Reporter