Chemical division weighs down General Beltings
BUSINESS REPORTER
LISTED conveyor belts and chemical manufacturer, General Beltings Holdings’ profit for the year to December 31 2020 plummeted 84% to ZWL$42.3m from ZWL$258.6m in prior year weighed down by the group’s chemical division.
The performance of Cernol Chemicals which manufactures both alkaline and acidic liquid and powdered detergents for CIP, gel type conveyor lubricants and manual vessel cleaning, was negatively affected by the Covid-19 induced lockdown which restricted customers from buying chemicals.
“Cernol Chemicals volumes declined by 15 % to 397 metric tonnes when compared with the prior year’s 467 metric tonnes due to the reduced demand attributable to the negative impact of the lockdown measures,” board chairman Godfrey Nhemachena said in a statement accompanying the group’s financial results..
“Nevertheless the division recorded a marginal decrease in turnover of 2.5% at ZWL$118m when compared with prior year’s ZWL$121m due to a favourable product mix and new market niches.”
Total volumes for General Beltings increased by 10% to 698 metric tonnes from 636 metric tonnes.
The volumes gain more than offset the Cernol Chemicals losses.
Revenue for the group grew 52% to ZWL$334m from ZWL $219m reported in 2019.
Total assets stood at ZWL$400m from ZWL$343m.
Volumes at the rubber division increased by 78% to 301 metric tonnes compared to 169 metric tonnes recorded in 2019 due to improved off take driven by the mining sector.
Nhemachena said greater operational efficiencies and the consequent price competitiveness relative to import parity enabled the division to secure a consistent order book throughout the year, resulting in the divisional turnover at ZWL$216m increased by 120% when compared with prior year’s ZWL$98m.
Operational cost increases were contained within inflationary levels despite significant increases in labour and utility costs, resulting in operating profit of ZWL$91m which was a 20% increase on prior year’s ZWL$76m as the company benefited from market consolidation efforts in the mining sector and opportunities arising from Covid-19 increased hygienic awareness.
Nhemachena said in future General Beltings will strive to consolidate further its market position in the mining sector.
He said Cernol chemicals will endeavour to regain its market share in the reopened economy underpinned by growth from both the mining and agricultural sectors.
General Beltings remained optimistic that the retention of key skills and further strengthening of established relationships will assist the company in delivering a sustainable profitability in the ensuing year.
