Turnall in $2,5m investment

HARARE - Listed asbestos manufacturer Turnall Holdings (Turnall) has invested $2,5 million in a new equipment to boost capacity and revenue.

The group also plans to boost exports — which were knocked down by an asbestos ban in its key markets.

John Jere, Turnall’s chief executive, said the state-of-the-art equipment, to be commissioned at its Harare plant in June, will enable the company to compete in the high-end segment of the housing market.

“We are capacitating the business in anticipation of a boom in the construction industry,” he said, adding that the investment is expected to grow the company’s market share.

The equipment, acquired from Italy, has the capacity to produce between 45 000 and 50 000 roof tiles.

“The company, in view of its long term goal of becoming a one-stop-shop for all building products, will continue its research and development and has plans to build onto this vision by introducing more complimentary products in the next three years,” said Jere.

In the past few years, Turnall’s operations have been hampered by limited cash flow, delays in customer payments, low investment and high cost of borrowing.

Jere said despite the prevailing economic challenges, Turnall will continue to strategically position the business through capital expenditure in enhancing both technology and product offering.

In the full year to December 2012, Turnall’s basic earnings per share came down 74,07 percent to 0,21 cents as the group suffered reduced revenues and operating profits.

Turnall, which is facing competition from players such as PG Industries and the recently launched Vaka Concrete, saw its revenue dropping 18,04 percent to $42,5 million while operating profit was down 41,18 percent to $4,32 million.

Finance costs also increased by 35,23 percent to $3,1 million worsening profitability for the group.

In the period under review profit after tax was $1 million down from $3,9 million prior year comparative.
 
Besides the subdued performance Turnall remains upbeat on the future with Jere indicating that the company will continue on the lookout for opportunities.

“Exports and pipes continue to offer real opportunities for sales volume growth during 2013. A number of projects, originally ear-marked for 2012 have now received funding and supply into these projects is expected to resume during the first quarter of 2013,” he said. - John Kachembere

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