Conveyor beltings products manufacturer, General Beltings Holdings Limited’s volumes for the first quarter to March 31, 2020 rose 38 percent compared to same period last year due to improved activity at the rubber division dominated by carried over orders as at December 31, 2019 prior year end.
The rubber division continued to register a good performance despite the challenging business environment.
Finance director Patrick Munyanyi, said the company remodelled its business in line with the macro-economic policy pronouncements that have had an impact on businesses across sectors.
The period under review was characterised by limited access to foreign currency and inflationary pressures that resulted in waning disposable incomes.
This also resulted in high input costs therefore increasing the cost of doing business.
“The company remodelled its business in response to the macro-economic policy pronouncements with emphasis on delivering a commensurate value proposition to its customers and at the same time mitigate against the exchange rate risk.
“Due to the continuous process enhancements and strategic alliances as well as regional economic dynamics which have the effect of evening the playing field, the Rubber Division continues to improve its comparative position against regional manufacturers,” said Munyanyi in a trading update for the quarter under review.
The effects of the inflationary pressures such as low disposable incomes saw volumes for the chemicals division going down 36 percent compared with same period prior year due to depressed downstream aggregate demand.
The chemicals division’s personal and institutional hygiene market segment, however, recorded increased activity in the manufacturing of hand sanitisers and disinfectants.
The Ministry of Industry and Commerce has also noted increased production and demand in this segment with new players also emerging as the country fights against the spread of Covid-19 by promoting personal hygiene.
“However, the temporary decline in the tourism and travel industry will dent the laundry chemicals business although the dent is expected to be partially offset by increased demand of personal hygiene chemicals,” said Munyanyi.
Tourism and hospitality is one of the sector’s worst affected by the pandemic as countries effected travel restrictions as part of efforts to contain the pandemic. In terms of the job market, it is also estimated that the tourism sector will suffer more job losses than other sectors of the economy.
World over, the pandemic has already caused economic turmoil with capacity utilisation declining as businesses adopted measures that limit the spread of the virus, for instance the implementation of lockdowns.
For General Beltings, its operating divisions were deemed essential under the Covid-19 Government directive as it continued its operations in line with the Statutory Instrument guidelines.
The rubber division supplies the mining sector which has been identified by Government as key to the post Covid-19 economic recovery plan.
While management at General Beltings remain upbeat of survival going forward, general performance of the economy is hinged on the extent the Government stimulus packages will unlock foreign currency and enhance a timeous flow of raw materials.
Government announced an $18 billion stimulus package to help local businesses get back on their feet and enhance economic recovery efforts.