Border Timbers eyes West Africa

HARARE - Struggling wood producer, Border Timbers, said it is targeting new markets in Africa to hedge itself against the harsh economic environment prevalent in the country.

The company’s judicial manager, Peter Bailey, said Border Timbers, whose loses widened to $24 million in the full year to June 2016 from $4 million in the previous corresponding period, was not foreseeing any imminent changes in the economy.

“New markets are being explored in West and Central Africa,” he said, adding that concerted efforts for product and market diversification are under way with a view to expand the company’s revenue base.

“Engagement with lenders, creditors and shareholders on possible implementation of a scheme of arrangement are ongoing. Updates will be provided at the appropriate time,” he said.

In the period under review, the Rift Valley subsidiary saw its revenue increasing by 47 percent to $26 million from the prior year comparative, reflecting the combined effect of increased volumes and the change in distribution channels.

Bailey said increased volume was buoyed by resilient demand in transmission pole business in the Sadc Region.

“Pine products revenue was broadly steady with growth in the local and Botswana markets off-setting a slowdown in the Mozambican market and depreciating South African rand market,” he said.

“A net biological asset write-down of $16 126 133 was done during the year after a re-assessment of the plantation quality after the fire. The fire damage affected mainly mature trees. A total of

$10 547 122 was lost from the plantations due to fires,” he added.

Bailey noted that as part of the re-assessment process, a re-evaluation of the extent and impact of baboon damage, settler invasions and lower than expected yields was done.

“Plantation yields were slowed down by years of poor rainfall patterns and lately induced by the El Nino dry weather conditions and poor compartment stocking levels. Other income was up 910 percent, largely as a result of plantation fire salvage lumber sales,” he said.

The Zimbabwe Stock Exchange-listed firm’s selling and distribution costs were up 199 percent, in the main due to freight cost on poles business into the region driven by increased volumes through-put and better control of the distribution channel.

Administration expenses increased by 11 percent from the prior year. Other operating expenses were down 76 percent due to a nonrecurring loss on disposal of property, plant and equipment included in prior year of $991 518.

Finance costs were down 54 percent due to the successful loan restructuring exercise which saw better priced and longer tenure loans being negotiated.

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