Turnall struggles, blames drought and slow economy

Business Reporter

The company’s managing director, John Mkushi, addressed shareholders at the Annual General Meeting (AGM), revealing that Turnall started the financial year (FY24) on a “very difficult note” with “very depressed demand” for most of its offerings. This has forced the company to reduce production to manage cash flow.

Mkushi explained that since the beginning of 2024, average demand has hovered around 60 percent of normal levels, leading to “severe cash flow constraints” and hindering the company’s ability to turn a profit. However, he offered a glimmer of hope, suggesting a gradual uptick in demand and a potential break-even position for the year by the second half.

The reasons behind the slumping demand are attributed to the current state of the Zimbabwean economy. Mkushi pointed to the severe droughts plaguing the country, resulting in one of the poorest agricultural seasons on record. Since Turnall’s business is heavily influenced by the agricultural sector’s health, this drought has had a significant impact.

Further contributing to the slowdown was the suspension of the country’s forex auction floors in November 2023. This, coupled with a delayed announcement of the new monetary policy, led to a wait-and-see approach from businesses, further dampening demand for Turnall’s products.

Despite the current difficulties, Mkushi highlighted some positive developments. The company’s plans to install additional production capacity in Harare are on track, with the plant expected to be operational by year’s end.

This expansion is anticipated to improve production efficiency, reduce costs, and enhance competitiveness against alternative building materials like IBR sheets. Additionally, Turnall has acquired equipment from a discontinued operation in the UK, which will further streamline operations at the Bulawayo plant.

The company has also undertaken significant cost-cutting measures, including workforce reductions, to manage cash flow. Mkushi expressed confidence that when demand rebounds, Turnall will be well-positioned to rebuild its skills base.