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Zimbabwe: Turnall Hikes Prices By Over 700 Percent
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Financial Gazette (Harare)
8 May 2008
Posted to the web 9 May 2008
Harare
TURNALL Holdings, a fibre cement manufacturing concern, has hiked prices for its products by more than 700 percent, a move likely to deepen the cost crisis faced by the construction industry.
Under the new price list, a 12-foot (ft) asbestos sheet now costs $2.2 billion from $306 million. A pair of endurite asbestos ridges now costs $1.1 billion, up from $146 million a pair.
The smallest size (4ft) of asbestos sheets now costs $848 million.
Robert Dube, the company's finance director, said the increase in prices was a result of the escalation in production costs.
"The cost of production is also increasing, and hence we have to adjust our prices as well," he said
The Financial Gazette has also established that production at the company has been temporarily halted, triggering a shortage on the market.
The product is only available on the parallel market where it is fetching exorbitant prices.
The commonly-used 12ft asbestos sheet fetches $5.1 billion on the parallel market, while a pair of ridges costs $2.8 billion.
Analysts who spoke to The Financial Gazette said the development was likely to worsen the crisis already being experienced by the construction industry.
Some companies are facing imminent closure as they fail to secure building materials.
In its financial statement for the year ended December 31 2007, the company's chairman, Herbert Nkala said Turnall had experienced problems in securing raw materials.
"The company was increasingly under pressure on the working capital front as suppliers of our major raw materials and other inputs continually demanded cash upfront for purchases of goods and services," said Nkala.
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Turnall recently experienced phenomenal growth in volumes due to a boom in housing projects under Operation Garikai/Hlalani Kuhle.
The Zimbabwe Stock Exchange-listed company is currently fighting a battle with South African legislators, who are expected to announce a ban of asbestos sales in the country.
"The calls for an asbestos ban continue to gather momentum in South Africa...The company has embarked on a project to procure alternative technology designed to produce an acceptable product in the export market," said Nkala.
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