Allied Timbers starts  exports to Zambia JOSEPH KANYEKANYE
JOSEPH KANYEKANYE

JOSEPH KANYEKANYE

Martin Kadzere Senior Business Reporter
Allied Timbers Holdings has started exports to Zambia as the competitiveness of its traditional markets has been “significantly” affected by the depreciation of the South African rand.
South African and Botswana used to be Allied’s biggest export markets, but the fall of the rand against the United States dollar has lowered returns from those markets.

“We have started exports to Zambia and we are pushing large volumes of treated poles for rural electrification,” Allied chief executive Mr Joseph Kanyekanye said in an interview.

He said the company was also looking at the Angolan market and exports could commence before end of the year. Mr Kanyekanye said officials from Allied were in Angola two weeks ago to carry out a market study.

“It is a cash market but very difficult to manoeuvre. There are challenges in terms of logistics and language barriers.

“But there are areas that we have identified where we can supply our products profitably.”

He said domestics sales remained the major source of revenue. The company has since restructured its domestic marketing channel and is now directly feeding the informal sector as opposed to the old system where it sold products through merchants.

Last year, Allied closed its Botswana business due to the fall in demand for roofing timber material in that country.  It had set up a division in Botswana in 2004 and had five branches, a pole treating plant and a wooden truss factory.

The company is now leasing the properties. It also identified a distribution agent for its products.

Allied Timbers took a strategic decision to enter the Botswana market to generate foreign currency during the hyperinflation era.

However, the sector is now dominated by Chinese businesses selling cheap steel trusses.

Meanwhile Mr Kanyekanye said the company has temporarily suspended its plant modernisation programme due to cash constraints. In April this year, the company commissioned a $1 million sawmill at Gwendingwe in the Manicaland Province.

Allied wanted to replace the other four old mills to achieve production efficiencies. The firm directly employs 1 400 people and is presently operating at 64 percent.

“Due to the prevailing liquidity challenges, we have temporarily put the programme on hold and that will be revisited once our cash flow position improves,” said Mr Kanyekanye.

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