Shame Makoshori, Chief Business Reporter
ZIMPLOW Limited is relocating the bolts manufacturing plant run by its operating division, Tassburg, to Bulawayo as the Zimbabwe Stock Exchange-listed steel products manufacturer moves to capture the southern market.
The relocation of the plant is expected to boost Tassburg’s capacity, which averaged 30 percent last year.
“The (bolts) division will take advantage of the strategic supplier relationships that it is currently enjoying to dominate the local fastener distribution,” Zimplow chairman, Oliver Chidawu said.
“Tassburg’s bolt plant will be physically moved to Bulawayo. The screw plant will continue to operate and management is confident that if the manufacturing sector starts rebounding, the division will, in turn, experience a rebound,” Chidawu said in a commentary accompanying the group’s financial results for the year ended December 31 2009.
Tassburg’s net assets were acquired by Zimplow in December 2008.
The company, which reported a US$21 300 operating profit during the period under review, manufactures and distributes wood screws, veranda bolts and high tensile bolts.
It is currently operating as a division of the farm implements manufacturer, which also controls CT Bolts and is worth US$11 million. Zimplow reported a US$2,2 million post tax profit in the full year to December 31 2009.
Group turnover, at US$9 million, was driven by the domestic market, which contributed more than 50 percent of revenues. Basic Earnings Per Share was 0, 01 cents.
Profitability was largely underpinned by strict cost controls and the removal by the Reserve Bank of Zimbabwe of restrictive retention policies last year.
Zimplow’s turnover was however, much higher compared to figures that have been reported by related manufacturers in the past month.
Chemical products manufacturer, Chemco Holdings, reported US$5,5 million in turnover while Apex Corporation, the giant conglomerate, last week reported a US$7,3 million turnover.
Zimplow’s flagship Mealie Brand, which among other things, manufactures farm implements, reported a 35 percent fall in full implement sales on the comparative period in 2008.
Exports declined by 53 percent. Chidawu said the decline followed Zimplow’s exit from the Angolan market, stiff competition and drought in east Africa, where the Zimbabwean firm had been slowly carving up a market for its range of steel products.
The group is, however, worried about the lack of working capital in Zimbabwe, where banks are failing to win back public confidence.
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