Nqobile Bhebhe, Senior Business Reporter
TIMBER milling and manufacturing company, Border Timbers Limited is focusing on expanding its export reach in the Sadc region taking advantage of various ongoing rural electrification and infrastructure development projects.
The firm said efforts are underway to expand exports with particular focus on Zambia, Mozambique and Botswana.
In an audited financial statement for the year ended 30 June, the firm said its product quality remains highly regarded in the market and the current marketing efforts will increase demand for the company’s kiln-dried timber.
As such, it said improved performance is anticipated in the poles business due to increased demand for the product in the Sadc region where rural electrification projects and infrastructure developmental projects are attracting financial support.
“We forecast poles sales performance to be bolstered by the Mozambique, Botswana, Zambia as well as the local market,” reads part of the financials.
In the period under review, treated pole sales volume was 10 169m3, a 7,4 percent improvement from the prior year.
The firm said recapitalisation remains a key priority with replanting programme already on course to reduce the unplanted area to industry standard of five percent in the next three years.
It is in the process of recapitalising two sawmills with the latest milling technology and the commissioning of the new machinery is expected by the end of 2023 financial year.
The timber firm said harvesting operations performed well with the plant optimisation broadly on plan.
“The outsourcing strategy on harvesting continues to stabilise the sawmills log supply which resulted in high plant capacity utilisation.
“All logs supplied to the processing plants were from the company’s own plantations with no external logs purchased.”
According to Border Timbers, lumber production volume was 43 930m3 representing a four percent lower margin than prior period, driven by low customer demand during the period under review.
“Lumber sales volume was 43 120m3 (FY2021: 49 047m3), the reduction was mainly because of lower aggregate demand primarily in the local market,” it said.
During the period under review, 713 hectares were planted, a significant improvement compared to prior year.
On financial performance, inflation adjusted revenue for the period was ZW$4.79 billion, an 11 percent increase from prior year, primarily driven by consistent product quality of kiln-dried timber resulting in better average selling prices.
The inflation adjusted operating expenses were 85 percent higher as compared to the previous period mainly driven by inflationary pressures.
Meanwhile, early this year, the milling and timber manufacturing concern exited judicial management after reaching consensus with a major shareholder, VP Claimants, over the allotment of final awards compensating it for the loss suffered after part of its land was acquired by Government for resettlement.
It had been placed under provisional judicial management in January 2015 and went into final judicial management in April 2016 after failing to service debts to several financial institutions.
Following approval by the shareholders at the EGM held in January 2022, and the subsequent approval by the High Court on the 14th of March 2022, the company exited judicial management.
This led to the reinstatement of the board of directors who took over the control of the company from the judicial manager.
“We express our appreciation and gratitude to Peter Bailey (judicial manager), and the management team, who led the mompany and weathered the storms during the period of judicial management,” it said.
Article Source: The Chronicle