Turnall banks on ZW$2bn war chest


ZIMBABWE’S biggest roofing and piping products maker has projected recovery, boosted by the government’s focus on revamping crumbling infrastructure.

The Zimbabwe Stock Exchange-listed Turnall Holdings Limited said this week growth in the coming year would also be underpinned by robust local authorities’ demand that has been boosted by about ZW$2 billion (about US$19 million) state injections into housing projects.

Turnall spoke a few days after government announced a ZW$927 billion (about US$8,8 billion) 2022 national budget, under which Treasury plans to inject ZW$500 million (about US$4,7 million) into a National Housing Fund that is seen as a key factor in addressing Zimbabwe’s 1,2 million waiting list.

Finance and Economic Development minister, Mthuli Ncube also plans to release ZW$1 billion (about US$9,5 million) and ZW$750 million (about US$7,1 million) war chests towards civil service housing.

“There are good prospects for growth in the construction industry particularly at local authorities’ level and national government projects,” the firm said in financial statements for the third quarter ended September 30, 2021.

“The company is optimistic that the business will post better results in 2021 despite the many challenges prevailing in the economic environment. This will be achieved through volume growth, cost containment and further realignment of business processes.”

Turnall ended the period stronger, with local demand steeper than supply, which resulted in incapacities to service foreign markets.

Cumulative aggregate volumes grew by 13% during the review period, compared to the same period in 2020.

“Fibre cement pipes contributed 2% of the year-to-date sales volume for the same period,” Turnall said.

“Concrete roofing tiles contributed 19% of total sales volumes, representing a 6% increase compared to last year. The company is investing in a new model plant that will improve the product variation and automate production processes.

“The migration from fibre cement pipes to glass reinforced pipe manufacturing is at an advanced stage. Volume growth, balanced with competitive pricing, operating cost control, and working capital management remain key focus areas for our management teams,” the firm added.

On Monday, researchers at the Harare-based advisory, Inter Horizon Securities (IH) said Ncube’s 2022 national budget gave impetus to the growth of Zimbabwe’s construction sector.

“The budget attempts to build on gains made in 2021 in the stabilisation of the local currency and an increase in production,” IH said in its analysis.

“There was a higher emphasis on construction and social welfare signalling an end to the ‘austerity’ period.

“Financial reports throughout 2021 have consistently shown increasing retail volumes, implying some recovery in consumer demand. Companies servicing the infrastructure industry such as Proplastics, Lafarge and Masimba have also shown improvement in order books, indicating growth in capital expenditure.

“The local economy clearly has potential for continued growth. Of concern is the widening foreign currency premium which is promoting speculative and rent-seeking behaviour while stoking inflation,” IH said.






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