Turnall set to tap SA market

Business Reporter
TURNALL Holdings, the manufacturer of roofing and piping materials, is set to regain a significant chunk of the export market as the Zimbabwe Stock Exchange-listed company prepares to commission its non-asbestos plant.
The US$5 million plant, which is based in Bulawayo, will use PVA and cellulose fibres to produce a diversified product range which, in addition to the traditional corrugated sheet, will include ceiling, fascia and barge boards.
This will enable Turnall to tap the South African market again, which used to be the major importer of Zimbabwe’s asbestos before it imposed a ban on use of chrysotile.
Turnall realised most of its revenue from domestic sales as exports, mainly to Moza-mbique and Botswana, contributed only 2,1 percent of total revenue.
“It has always been the company’s strategic drive to re-enter South Africa roofing market after the 2008 asbestos ban in that country. Exports into the regional markets of South Africa, Botswana and Mozambique will go a long way in strengthening Turnall’s regional presence.”
Turnall indicated that it has already received some orders and “deliveries are set for April pending the South Africa Bureau of Standards registration which is currently in progress.”
Analysts have said broadening the export market was critical as a long-term source of revenue generator.
Chief executive, Mr John Jere, told analysts this week that the company was also planning to set up a similar plant in Harare.
Turnall’s full year revenue increased by 111 percent to US$34,9 million from US$16,4 million achieved during the same period last year on strong demand from tobacco farmers.
Volumes grew by 57 percent to 67 371 tonnes. Exports contributed 6 percent of the total volumes.
Operating profit was 104,1 percent ahead of US$2,5 million made the previous year.
The operating margin for the year at 15 percent was slightly below 16 percent achieved in the year prior to 2010. The marginal decline is largely due to high cost on raw material importation.
Turnall continue to import chrysotile fibre from Russia and Brazil following the closure of Shabanie and Mashava Mines.
It said the importation of fibres, at a cost of US$1 200 per tonne had the net effect in lowering the company’s operating margins. Buying them local would be 40 percent cheaper.
Profit for the year was US$3,42 million, 122,6 percent higher than the previous comparable period.
Earnings per share improved to US0,69c from US0,32c last year.
Turnall has declared a final dividend of US0,173c per share
Turnall enjoys about 84 percent of the local roofing materials market share ahead of competitors such as Zimtile and Treggers.
Going forward, Turnall said the anticipated growth in agriculture would help underpin local volume sales in building products while the re-entry into the region will drive exports.
“In addition to these volumes and largely as a result of the infrastructural developments expected in 2011 around water and sewer reticulation, pipe sales are set to significantly contribute to overall sales performance of the business.
“The company started the year with a strong pipe order book driven largely by current council and municipal rehabilitation programmes.”