ALLIED Timbers plans to double export revenue in the first quarter next year, taking advantage of the growing demand for timber in Mozambique and Zambia, an official has said.
Exports are currently contributing 20 percent to the company’s revenue but the increase in demand for timber in Mozambique and Zambia will see regional sales accounting for 40 percent, acting chief executive Mr Chinyani said in an interview this week.
“In Zambia, we are getting good orders for transmission poles from Zesco (the country’s power utility) and we expect the upward trend to remain high,” said Mr Chinyani.
“(Similarly) . . . our exports to Mozambique have significantly increased. Mozambique used to source pine from Malawi which has since stopped and they are now relying on us.
“Despite liquidity constraints on the local market, we are getting 80 percent of our revenue from domestic sales but with activities happening in the export markets, we are targeting export sales contribution to our revenue to reach about 40 percent.”
With regards to the South African market, Mr Chinyani said despite huge demand, the company has taken a position to only trade in US dollar in light of falling rand against the greenback.
“The depreciation of SA rand is making the market very unattractive. Even though the prices are firming, it is not good enough to offset the impact of rand depreciation.
“So to cushion ourselves against exchange losses, we have taken a position to only accept US dollar.”
The rand plunged to a record against the dollar on Tuesday after the currency weakened as much as 0,6 percent to 14,3827 per dollar, before erasing the decline to gain 0,1 percent later, paring its slump this year to 19 percent. Zambia’s kwacha also fell to new record on Tuesday as copper prices edged to a six-year low on concerns over flagging demand in China, the biggest consumer of the mineral.
The kwacha tumbled 5,26 percent to 14,4100 against the dollar, extending its losses so far this year to nearly 56 percent. But this will not affect Allied exports as all contracts with Zambian customers are denominated in the US dollar, Mr Chinyani said.
“The clients we are dealing with in Zambia have always been paying in the dollar, so we are not affected.”
He said the company has made some in roads to increase exports to Namibia where it is supplying treated poles and will soon start exporting saligna wood.
Allied is wholly owned by the Government and has three divisions — Allied Timbers Zimbabwe, Allied Timbers Saligna and Altim Zimbabwe. Its operations involve plantations, harvesting and processing, marketing and selling of both pine and gum.
Its operations are concentrated mainly in the Eastern Highlands and the Midlands.
The company specialises in sawn timber, poles, and various other value added timber-based products such as doors, flooring timber and blackboards.
Source: The Herald