Tiles producer, Turnall Holdings Limited strategised to export with Zimbabwe’s local market sales volumes decreasing in the third quarter of 2019.
Board Chairperson, Rita Likukuma, in the latest trading update, says the Group adopted a regional export strategy to generate foreign currency and to reduce the impact of declining sales volumes in the local economy.
“Export sales volumes for the quarter contributed 2,8% of sales volumes compared to 0.2% in the previous year comparative quarter.”
“Export sales volumes for the nine months period contributed 2,5% of sales volumes compared to 0.1% in the previous year comparative period.”
Besides reduced sales volumes, the chairperson says disposable incomes in the economy lagged inflation, leading to a decline in demand for the Group’s products.
“The Group also faced challenges in accessing foreign currency from the interbank market and this affected the timely importation of raw materials and spares, thereby impacting production efficiency.”
“The country experienced significant power shortages during the third quarter and the power utility introduced load shedding for up to eighteen hours a day. This affected production output and production costs as the Group switched to expensive alternative power sources.”
“Prices of major commodities in the economy increased in response to the declining exchange rate between the Zimbabwean dollar and US dollar. There were significant price adjustments for electricity and fuel which in turn affected pricing of most goods and services in the economy,” Likukuma described the Zimbabwean trading environment.
The Group’s sales volumes for the quarter were 31% below the prior year comparative quarter while the year to date sales volumes were 28% below the previous year comparative period according to the Board Chairperson.
“The business was adequately stocked during the period under review ; hence the decline in volumes was attributed to low aggregate demand,” she says.