During the group’s financial year ending October 31 2009, Hunyani’s capital expenditure for the year amounted to US$181 424 and was limited to “essential items only”.
The group said during the reporting period it temporarily shut down its Norton plant and redeployed of more than 300 employees to other operations in Harare and Marondera.
Hunyani said the move was forced upon it by the drop in sales volumes locally and in the region to unviable levels.
The group’s turnover and operating income before interest amounted to US$23,3 million and US$710 643 respectively.
The company’s financial results showed that impairment provision and gain investment property resulted in a credit-to-the-income statement of US$199 853. The company said it remained on loan for most of the period due to the increasing demands for working capital and as a result net finance costs amounted to US$134 966. The group however managed to close the year in a net cash position.
“The group has lacked the financial resources to embark on any major capital expenditure for the past seven years,” the company said. “We have fallen behind our competitors in terms of manufacturing capability. In order that we address this, a three-year corporate capital plan is being complied which will include the introduction of new technology to enable us to regain our dominant position in local and regional markets.”
The group said it anticipated growth in the export and local markets during the current reporting season provided “our competitive edge is not eroded by unrealistic wage demands”.
Hunyani joined the bandwagon of companies that lament uncompetitive export markets as the major reason for not exporting during the period under review.
Cost of production was said to be still high. The unavailability of working capital had also hindered the sampled firms from exporting primarily because they could not import enough requisite inputs to produce high quality goods demanded in international markets.
Other reasons cited for not exporting where productive capacity and lack of foreign currency.