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Sikhulekelani Moyo, Business Reporter

ZIMBABWE Stock Exchange (ZSE)-listed company, National Tyre Services (NTS), says it will leverage new import regulations on suspension of duty on commercial tyres and duty in foreign currency to gain market share.

The company is engaged in retailing and retreading of tires, wheel alignment, wheel balancing, and related services, with 16 retail outlets situated across the country of which five are located in Harare.

In its 2023 National Budget, the Government has provided duty-free importation of capital equipment for use by the agriculture, energy, manufacturing, mining, and health sectors.

The intervention is part of measures to reduce the cost of doing business for local businesses while promoting sectorial growth. NTS group chairman, Mr Rutenhuro Moyo, said in a statement accompanying the company’s financials for the year ended 30 September 2022 that the company was also capitalising on the farming season demand for tyres and tubes complemented by the festive season demand, to grow sales.

“National Tryer Services will leverage on the new import regulations on suspension of duty on commercial tyres and payment of duty in foreign currency to gain market share,” he said.

“We remain confident that measures being implemented by the Government will maintain current exchange rate stability and continue to reduce inflation to enable full business recovery.”

Meanwhile, NTS said during the year under review, sales grew by 12 percent to $1,885 billion from $1,651 billion in 2021 due to the continued implementation of the turnaround strategy.

Gross profit increased by 45 percent to $1,147 billion while total operating expenses increased by 33 percent to $1,137 billion due to cost-cutting measures implemented by management in a bid to manage cash flows. Mr Moyo said the company’s premium tyre sales volumes grew by 26 percent during the opening six months of the year compared to the same period prior year due to strong supplier relations.

The derelict Dunlop factory in Bulawayo

“The company managed to retain customers through improved premium Dunlop stocks required in the market,” he said.
However, he noted the business continues to be affected by power outages and inadequate foreign currency required to import budget tyres from China and India to meet market demand.

Mr Moyo said power outages due to depressed electricity generation affected retreading for the first half of the year.
He said factory efficiency decreased with tyre volumes falling by 16 percent when compared to the same period in 2021.

“Although power cuts were severe, the company managed to keep retreading factories running to support transport operators in the economy,” he said.

Citing ‘fluid outlook’ the company could not declare a dividend to ensure adequate service delivery for long-term sustainability.
Captains of the industry have been calling upon investors to invest in the tyre and rubber sector to aid import substitution and create more employment opportunities.

Given the growing vehicular population in the country, the industry lobby groups say the demand for tyres has been high with the bulk of supplies coming from imports.

Reliance on imports has been worsened by the demise of Bulawayo giant tyre producer, Dunlop, some years ago. — @SikhulekelaniM1.