Turnall eyes 2026 export rebound with Bulawayo plant upgrade

Nqobile Bhebhe, Zimpapers Business Hub

LISTED fibre-cement products manufacturer, Turnall Holdings Limited, is positioning itself for a strong rebound in regional exports by 2026, following the ongoing upgrade of its Bulawayo sheeting plant — a move expected to significantly enhance production capacity and product mix.

The company, which has been operating in a challenging environment marked by tight liquidity, foreign currency volatility, and inflationary pressures, believes that modernising its facilities will be key to restoring profitability and unlocking new markets.

Authorities have since introduced several initiatives to address these challenges, resulting in improved exchange rate and inflation stability.

“Resumption of export sales is also expected in 2026 after the planned upgrade of the Bulawayo sheeting plant,” said Turnall’s board chairman, Mr Grenville Hampshire, in the 2024 annual report.

The sheeting plant upgrade forms part of a broader capital expenditure programme, which saw Turnall invest US$3,2 million during the year under review — a significant increase from the US$567 927 invested in 2023. The funds have primarily been directed towards the new fibre-cement plant and templates for the Bulawayo facility.

The Bulawayo factory is being converted to produce non-asbestos cement (non-AC) products, in line with evolving customer preferences and regional market requirements. Once complete, the Bulawayo plant will exclusively manufacture non-AC products, while a new facility under construction in Harare — designed to produce 210 tonnes per day, double Bulawayo’s current output — will focus on AC production.

Civil works in Harare are underway, with commissioning expected at the beginning of the third quarter of this year, according to the report.

“The new sheeting plant is expected to be commissioned in the third quarter of 2025,” the group stated.

Turnall manufactures a range of building and construction materials, including corrugated sheeting, flat sheets, pan tiles, pressure pipes, sewer pipes, concrete roofing tiles, and related accessories. Its product line also includes garden décor, partition boards, barges, fascia, pantiles, slate and endurites, Ravenna concrete tiles, Nutech non-asbestos sheets, and Turnall Spanish pavers.

The company operates through three segments: Building Products, Piping Products, and Concrete Tiles.

Turnall reported a four percent decline in revenue to US$12,04 million, down from US$12,56 million in 2023, due to liquidity constraints and the El Niño-induced drought, which dampened demand.

“The group’s turnover for the year ended 31 December 2024 was US$12,04 million compared to US$12,56 million in the previous year. This represents a four percent decline, mainly due to liquidity constraints and the adverse effects of the El Niño-induced drought,” the company said.

Gross margin for the period fell to 19 percent from 23 percent the previous year, largely due to rising raw material costs and currency volatility.

“Margins were under pressure due to the rising cost of raw materials and exchange rate disparities, whose negative impact on the cost of doing business could not always be sustainably recouped through selling price adjustments.”

Operating expenses rose sharply, with the expenses-to-sales ratio increasing to 48 percent from 35 percent the previous year, driven by inflation spikes in the first and fourth quarters.

“A provision for obsolete and slow-moving inventory amounting to US$1,2 million was made during the year, mainly in respect of expired raw materials (synthetic fibres) and pipes that had not moved for over a year due to changing customer preferences. This stock provision is included in administration expenses.”

Additional provisions included US$267 771 for credit losses and US$111 710 for Intermediary Money Transfer Tax (IMTT), contributing to a widened loss of US$2,9 million, compared to US$1,5 million in 2023.

Despite the bottom-line loss, the group generated positive operating cash flows of US$1,5 million — a notable recovery from the US$6,4 million outflow recorded the previous year.

“In spite of the loss-making position, the group managed to generate US$1,5 million from operating activities, up from a negative US$6,4 million in the previous year.”

The group noted that its capital expansion programme has largely been funded through shareholder support, including loans and proceeds from a rights issue. 

Working capital, however, remains constrained and is being supplemented through bank borrowings. Net cash flows from financing activities amounted to US$4,94 million, compared to US$6,67 million in 2023.

Turnall’s management remains optimistic, banking on increased production capacity, an improved product portfolio, and cost-control measures to drive recovery.

“Current efforts to retool the factories will go a long way in addressing production efficiencies and improving our product offering, which is expected to result in revenue growth. 

“These efforts, coupled with the current cost containment initiatives, will bring material improvements to the performance of the group,” the company said.

Management is also focused on resizing the business and aligning operating costs with revenue-generating activities, with the aim of returning to profitability and strengthening cash flows in the medium term.

The strategic shift to segment AC and non-AC production between Harare and Bulawayo, respectively, is expected to improve efficiencies, reduce logistical costs, and better serve differentiated market needs.