HARARE - Listed paint and chemicals manufacturer Astra Industries Limited (Astra) plans to exploit new opportunities and improve its bottom line after closing down its non-core division Astra Steel and Engineering Supplies last year, management said.

The loss making engineering unit was shut down last year and some of its workers retrenched whilst others were redeployed to other group divisions.

The company is considering leasing the engineering subsidiary.

McKenzie Mazimbe, Astra group managing director, told shareholders at the company’s annual general meeting in Harare yesterday the Astra board and management resolved to focus on core activities, being paint and chemicals, to improve profitability.

Astra group comprises Astra Chemicals, which has two subsidiaries NCPDZ and Celmid-trading as Chemical enterprises, as well as Astra Holdings Limited which also has two subsidiaries Astra Paints and Astra Steel.

Mazimbe said group profit after tax for the quarter to December 2011 went up 46 percent to $549 000.

Turnover for the four months went up 16 percent compared to same period last year.

Paints and chemical operations’ revenue grew 19 percent and 13 percent respectively.

Operating expenses went up 10 percent, in line with the group’s annual budget.

Group aggregate cover stood at 2,3 months against a budget of 2,5 months while debtors’ days average were 42 days, two days above the targeted 38-day window.

Borrowings were just under $1 million. The company plans to increase operations at its Astra Paints’ Harare factory by adding new equipment and improving efficiencies.

Mazimbe said the move was meant to meet new trends which have seen the country’s market for paint shifting to the northern region.

He said an advertising blitz had been approved to make the paint division’s “quality brand” more visible especially given the competition from cheaper imports.

NCPDZ is currently working at full capacity and exporting most of its produce.

Astra’s 60 percent owned subsidiary, Chemical Enterprise, is seeking to increase its penetration in informal markets as well as traditional hardware outlets.

Astra Chemical is also operating at full capacity and servicing its traditional segments, but management is worried about low entry barriers which have seen an influx of cheaper imports.

Mazimbe said the chemical division is currently reviewing its procurement and marketing cycles whilst it explores opportunities in food related and non-commodity chemical businesses.

According to the group’s consolidated financial statements for the year ended August 2011, annual revenue stood at $22,7 million, up from $18,7 million at the end of 2010.

Operating profit for the year was $1,2 from $1,5 million in 2010 while total operating expenses stood at $6,5 million from $5,4 million at the end of the comparative period.

Borrowings amounted to $1,2 million compared to $783 917 prior year.