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Value Addition Sustains Border Timbers

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Timber producer and processor, Border Timbers’ value-addition units catapulted the company’s revenue earnings by over 200 percent in the six months  to December 31, 2019 to offset effects of a decrease in production of lumber and transmission poles, 263Chat Business has noted.

Acute power cuts weighed heavily on production of both lumber and treated poles.

During the period, production of lumber fell to just 28.4 000 cubic metres (m3) from 55.8 000 m3 realized on June 30 2019.

Treated poles production also fell from 12.6 000 m3 to 6 000 m3 by December 31, 2019.

However, value addition at the company’s mills (Sheba and Charter) resulted in improved selling prices hence boosting the company earnings, company Judicial manager, Peter Lewis Bailey said in a statement.

The company achieved revenue amounting to ZWL$ 110.1 million for the period up from ZWL$ 38.4 million in the comparable period.

“The major challenge affecting our operations is the shortage of continuous grid power resulting in the use of very expensive alternative sources. Production Volumes for  Lumber production is lower compared to same period prior year due to low production at the Charter sawmill caused mainly by power outages,”

“The low production had a knock-on effect on sales volume as this resulted in lower sales compared to prior year, however the improved quality and value addition at our mills resulted in improved average selling prices and better revenue. Treated poles reflect a decline in production and sales volume compared to same period prior year, this was because of lower demand during the half year period to 31 December 2019,” Bailey said.

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The company has seen improved demand for its poles from the export market.

“Currently there is increasing demand for our poles in the region and an increase in both production and sales is anticipated in the next quarter,” he said.

However despite improved revenue, profit for the year is lower, mainly driven by unrealized exchange loss primarily from a foreign loan with the net unrealized exchange loss amounting  to ZWL$ 46 842 252.

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