Paul Nyakazeya, Group Digital Editor 
GENERAL Beltings Holdings (GB) expects to increase its market consolidation on the back of logistical constraints caused by the Russia-Ukraine conflict, which is compelling its customers to replace imports with locally made products.
In a trading update for the quarter to March 31, 2022, the rubber, plastics and chemicals manufacturer said it would take advantage of the supply chain disruptions caused by the conflict to intensify market consolidation and meet local demand.
“The absence of a cessation in the Russia-Ukraine crisis and logistical delays will continue to disrupt the flow of materials into the sub-region. Therefore, local firms will be compelled to procure locally to avoid long lead times and working capital cycles.
“GB will focus on value preservation through continued profitability in the traditional markets, which are expected to be buoyed by improved mineral commodity prices and increased local demand as firms opt to procure locally,” the company said.
With the world having weathered the Covid-19 pandemic, the Russia- Ukraine conflict then emerged as a global flash point, which has spawned, among other things, global logistical constraints that have resulted in delayed delivery of raw materials.
Inevitably, the conflict has negatively impacted economies through pass-on increases on raw materials, energy, mining and agriculture input costs.
Meanwhile, GB generated an operating profit during the quarter under review, on the back of carried forward stocks and orders from prior year.
Volumes at 307 metric tonnes were 48 percent above the same period prior year’s volumes of 207 metric tonnes.
“Both operating divisions recorded growth in revenue and volumes compared with the same period prior year.
“In view of the limited pricing options and limited raw materials supplies, turnover on an inflation adjusted basis at $210 million grew by 23 percent from the $170 million recorded in the same period prior year,” the company said.
Gross margins and operating expenses were under severe pressure due to parallel rate indexing of local costs. As a result, operating profit is lagging behind budget.
“The raft of monetary policy measures aimed at arresting the exchange rate volatility have presented a profound challenge to business operations. The impact of abrupt policy directives incapacitates firms’ ability to effectively deploy working capital and erode market confidence.
“It is hoped that as measures take effect a more enduring and lasting solution will enable firms to gain traction in the latter half of the year.”
On Wednesday, the company advised its shareholders and the investing public that its major shareholder wished to consummate an offer to minority shareholders transaction in the company in compliance with provisions of the Zimbabwe Stock Exchange listings rules and the Companies and Other Business Entities Act.
“Accordingly, shareholders and the investing public are urged to exercise caution in trading in the company’s securities.
“Details of the offer shall be published in due course,” GB said.
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