Border Timbers Limited is engaging the government with the view to be compensated for the land acquired by the administration about 17 years ago.
The International Centre for Settlement of Investment Disputes (ICSID) Arbitral Tribunal, awarded Border Timbers and its then main shareholder VP plaintiffs US$125m over land acquired by the government back in 2005.
But, the government is yet to pay Border Timbers.
“The government has not paid any part of the award. The company has opened settlement negotiations with the Government of Zimbabwe as represented by the Ministry of Foreign Affairs and International Trade,” Board chairman, Elias Hwenga, said.
He said the company, pursuant to the Settlement Agreement with the former shareholder, has commenced its own separate negotiations with the government.
Hwenga said for the duration of the ICSID arbitration, the company has “continued to occupy and operate its forestry business on parts of its property and indeed, the occupation of the unaffected parts continues undisturbed”.
“Subject to full payment of the Border Award, the company has the right to continue operating its business on, and occupying, the unaffected parts,” he said.
“The view therefore is that the company continues to occupy the unaffected land and operate its business in the ordinary course until there has been agreement with the government on settlement of the Arbitral Award,’’ Hwenga said.”
In its financial results for the quarter to September 2022, revenue for Border Timbers grew 23% to ZWL$2.1m compared to the prior comparative period .
Profit for the reviewed period soared 1148% to ZWL$4.8m from ZWL$385k posted in the prior comparable period.
This is despite the fact that the company saw a decline in volumes in the reported quarter as lumber and poles volumes were down 23% and 68% respectively owing to weak demand in the local market.
As a result, the timber producer is looking to expand its export market while anticipating a strong recovery as Hwenga described the dip as ‘’temporary.’’
“’The temporary reduction in sales volume was mainly driven by low customer demand in the local market in the first two months of the first quarter with the month
of September showing good signs of a re-bound. We believe the demand for lumber will remain strong in the local market and we continue being aggressive to expand the export market,’’ Hwenga said.
He said the company was likely to be spurred by an improved performance which is anticipated in the poles business due to expected demand for the product in the Sadc region mainly for the rural electrification projects.