Online Reporter
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 improve production capacity and product mix significantly.
The company, which has been contending with a challenging operating environment characterised by tight liquidity conditions, foreign currency volatility and inflationary pressures, believes the modernisation of its facilities will be pivotal in restoring profitability and unlocking new markets.
Authorities have since rolled out several initiatives to address most of the key challenges, which have restored 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 is part of a broader capital expenditure programme which saw Turnall spend US$3,2 million during the year under review, a significant rise from the US$567 927,00 invested in 2023.
The funds have been channelled mainly 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, aligning with changing customer preferences and regional market requirements.
Upon completion, the Bulawayo machine will exclusively produce non-AC products while a new plant under construction in Harare, which has double the current Bulawayo output at 210 tonnes per day, will focus on AC production.
Civil works in Harare are underway, with commissioning expected at the beginning of the third quarter of this year, the report notes.
“The new sheeting plant is expected to be commissioned in the 3rd quarter of 2025,” said the group.
Turnall is engaged in the production of building and construction materials comprising corrugated sheeting, flat sheets, pan tiles, pressure pipes, sewer pipes, concrete roofing tiles and related accessories.
It also produces products that include garden decor, partition boards, barges, fascia, pantiles, slate and endurites, Ravenna concrete tile, Nutech non-asbestos sheets and Turnall Spanish pavers.
The company operates through segments, which include building products, piping products and concrete tiles. Turnall reported a four percent decline in revenue to US$12,04 million from US$12,56 million in 2023, weighed down by liquidity constraints and the El Niño-induced drought, which suppressed demand.
“The group’s turnover for the year ended December 31, 2024 was US$12,04 million compared to US$12,56 million in the previous year. This represents a four percent decline, which was mainly due to liquidity constraints and the adverse effects of the El-Nino induced drought, which suppressed the demand for our products,” the company said.
Gross margin for the period dipped to 19 percent from 23 percent in the prior year, mainly due to rising raw material costs and currency volatility.
“The 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 surged, with the expenses-to-sales ratio increasing to 48 percent from 35 percent the prior year, largely 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 and was mainly in respect of some raw materials (synthetic fibres), which had expired and some pipes that had not moved for over a year, mainly due to changing customer preferences.
“The 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 amounting to US$1,5 million, a notable recovery from the US$6,4 million outflow in the prior 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 said 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 re-tool 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,” said the company.
Management is also focused on resizing the business and aligning operating costs with revenue-generating activities, with a view to returning to profitability and strengthening cash flows in the medium term.
The shift in strategy 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.
As the commissioning of the two plants nears, Turnall’s return to the export market marks a significant milestone in the group’s recovery strategy, potentially opening new revenue streams and regional market penetration.
