NATIONAL Tyre Services (NTS) has revived its direct sourcing of affordable tyre brands from China, a development that is expected to improve stock availability and drive sales in the competitive Zimbabwean market.
This was revealed by Rutenhuro James Moyo, NTS board chairperson, in a statement accompanying the company’s financial results for the half year ended September 30, 2024.
“The company has resumed direct procurement of budget brands from China to improve product availability, retain market share while enhancing competitiveness,” he said, adding that the firm was “cautiously optimistic” of a better business operating environment.
“The government efforts and strategic initiatives towards Vision 2030 will drive a spate of developments across a number of sectors of the economy, and consequently, tyre usage will rise.”
Moyo hoped that the country’s power utility, Zesa Holdings, would continue to prioritise availability of power to industry.
“Prospects of better rainfall for the country from the second sub-season until the end of the forecast period, which spans from November to March, bring relief to the economy affected by El Niño-induced drought,” he noted.
“We are optimistic of strong demand for agriculture tyres as a result. As above, Zimbabwe hopes that the upcoming rainy season will improve water levels at Kariba Dam and enhance power generation capacity.
“Availability of electricity will minimise factory operating costs.”
- NTS cautiously optimistic of better business environment
- NTS revives China imports to retain market share
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Moyo said NTS had a “huge customer base” and was establishing a model of improved competitiveness to offer satisfactory service through stock availability across all its branches.
The Zimbabwe Stock Exchange-listed company recorded a slight decline in new tyre volumes in the period under review, owing to supply chain glitches.
Although volumes were affected, light truck tyres grew by 67% as compared to the comparable period, due to strong demand as “we supplied organisations carrying out drought alleviation programmes across the country and companies involved in infrastructure development programmes driven by our government”.
“Our factories continue to produce highly competitive, quality re-treads as well as maintaining good turnaround time.
“Re-treading factories managed to circumvent power supply limitations through flexible operations.”
Sales declined by 36% to ZiG37,6 million, while gross profit increased by 2% to ZiG12 million.
Total operating expenses declined to ZiG19 million. The company incurred a loss before tax of ZiG36 million, largely due to foreign exchange movements.
l Exchange rate as at September 30, 2024 was US$1:ZiG24,9
