Transcript Full Document

17TH CHINA INTERNATIONAL FAIR FOR INVESTMENT
AND TRADE: 8-11 SEPTEMBER 2013
INVESTMENT AND TRADE OPPORTUNITIES IN
ZIMBABWE WITH FOCUS ON ALLIED TIMBERS
ZIMBABWE (PRIVATE) LIMITED
By
Dr Joseph Kanyekanye
Group Chief Executive Officer – Allied Timbers
&
Chairman – Timber Producers Federation of Zimbabwe
E-Mail : [email protected]
Website : www.alliedtimbers.co.zw
Presentation
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Introduction
Zimbabwe Reloaded
Forecasted GDP
Growth
Forecasted Sectoral
Growth
Areas of Competitive
Advantage
What we seek
Allied Timbers
Opportunities
Thanks
Introduction
Stability and political unity since 2009
Resource rich country with arable land
PLUS agric/industry link
 Education – unquestionably Mugabe
legacy
 GDP growth averaging 7% in last 2
years
 “The arm of commerce has borne away the gates of a strong city,
oceans no longer divide but link” Frederick Douglas 1818-1895
Constraints – I refuse
Zimbabwe Reloaded
Gold reserves estimated at $billions but currently producing
12mt per year but capacity to do 50mt/year exists
Abundant Nickel under care but can produce 10 000 tonnes
Second largest PGM in Zimbabwe worth $400billion. 4 projects
on feasibility stage.
Abundant coal reserves at 2.7 million tonnes production/year
Chrome production rose 167% in 2010 to 517 000t.
Zimbabwe Kimberlitic diamonds at 4 million carats and alluvial
reserves can account for at least ¼ of world production
Manufacturing recovery
One stop shop
CZI as a partner: invitation, co-operation agreement, enhance
trade
ZIMBABWE FORECASTS
% p.a.
GDP Growth
Inflation – end
year
Interest Rates (USD)
Source: Hawkins 2010
2011 2012
9,3
7
6
6
13
10
ZIMBABWE SECTORAL GROWTH
% p.a.
2011 2012
Source: CZI2011
Agriculture
25.0
15.0
Mining
45.0
55.0
Manufacturing
9.5
12.0
Distribution
8.0
10.0
Tourism
6.0
6.0
Key areas of competitiveness in Zimbabwe
Clothing
and textile industry
Agro-Processing
Chemicals & Tourism
Manufacturing - Food
Pharmaceuticals
Metals and Minerals
Technology
Wood and furniture
WHAT WE SEEK
INCREASED
2 WAY TRADE: HUNT IN PACKS
WIN – WIN RELATIONS WITH THE ADVENT OF
GLOBALISATION – INTERNATIONAL INVESTMENT
 HASSLE FREE BUSINESS FREE OF TOO MUCH
REGULATION
 “LOOK EAST’ INVESTMENT THINKING
INVITATION TO ZIMBABWE INDUSTRIES AS NEW
INVESTORS ESPECIALLY ON VALUE ADDITION
LINES OF CREDIT: $2B
JV PARTNERS: EQUITY, TECHNOLOGY TRANSFER,
BUSINESS OPPRTUNITIES, INTERNATIONAL LEASING
INNOVATIVE LONG TERM FUNDIN
PROCUREMENT AND TRADE
2. SECTOR: AGRICULTURE FORESTRY)
Plantations
Sawmilling
Value
addition
Retailing and
Wholesaling
Exports
 companies
LOCATION OF THE PROJECT
MANICALAND & MIDLANDS
PROVINCE
COMPANY PROFILE
4.1.1 PLANTATION DEVELOPMENT
• Allied Timbers Zimbabwe (Pvt) owns 60% of all the plantations in
Zimbabwe. The Company maintains a 25 year tree cycle that enables it
to harvest 30000m3 or 360000m3 of round logs per month and per year
respectively. Allied Timbers Zimbabwe is the market leader in providing
timber products locally.
4.1.2 SAWMILLING
• Allied Timbers Zimbabwe owns Erin Estate, Stapleford Estate and
Nyangui Estate in Nyanga District, Chimanimani Estate and
Gwendingwe Estate in the Chimanimani District of Manicaland. The
Company operates a sawmill in each of the above Estates. At Cashel
Estate the Company operates a mobile sawmill. In Nyangui Estate and
Maswera Forest the Company has contracts for sawmilling with
Indigenous Business Contractors. The expected pine timber production
in year is 120 000m³ in year.
4.1.3 POL
MANUFACTURING
• The Company produces 4000m3 of poles at Mtao and Ngungunyana
Estate of which 2400m3 is treated at Mtao Estate while the balance of
1600m3 of raw poles is exported to Botswana per month.
ROOF TRUSSES MANUFACTURING
• The Company operates roof trusses plants Zimbabwe and Botswana.
TIMBER RETAILING
• The Company has six timber retail outlets in Harare, Chitungwiza,
Gweru, Mutare, Masvingo and Bulawayo.
MARKETING
Exports markets to the region are mainly to South Africa, Botswana and
Namibia. 50% of timber produced is exported while the remaining 50% is
sold locally. In addition the Company has factories that produce roof trusses
in Harare and Bulawayo, finger jointed timber at its Mutare Factory and
treated poles at Mtao Estate. Export markets are more attractive because
of the certainty of payment while poor liquidity in the local market results in
customers paying their accounts late. Both local and exports markets are
insatiable. The Company also retails its products in all major towns of
Zimbabwe.
CHALLENGES FACING THE COMPANY
• Ageing machinery resulting in high repairs and maintenance costs.
• Long outstanding debts as customers are failing to service their accounts
on time
• Non availability of long term funding in the market
• Working capital constraints
LOAN FUNDING
• The Company needs around USD7 million to modernize its four major
sawmills.
Description
Units Required
Unit Cost
Total
Sawmill
4
USD600,000
USD2,400,000
Bell Skidders
10
USD200,000
USD2,000,000
Bell Telelogers
8
USD150,000
USD1,200,000
Roads Rehabilitation
4 sites
USD1,400,000
USD1,400,000
Grand Total
USD7,000,000
• The Company will prefer a long term loan for 3-5 years at favorable interest
rates below 9% per annum.
• From the projected output of 120,000m³ in a year the company is expected to
yield USD26,400,000 in year in terms of revenue.
• Assuming that the cost of sales will be around 60% net profit will be around
USD10,560,000
• From the above it is quite evident that this is a very liquid project with a
payback period of less than one year
• Return on investment of more than 51% in the first year.
INVESTMENT
OPPORTUNITIES
Lumber manufacture
Power Generation
Pulp and Paper
Exports
Machinery Supply
CCA/Creosote Imports
Charcoal Production
Particleboard manufacture
Furniture Manufacture
Forestry
Match Production
Small scale sawmilling
Construction – timber homes
‘I am not smart, I spend more time on the problem than other
people" - Albert Einstein
Dr. Joseph Kanyekanye – Group Chief Executive Officer
4th Floor Angwa City Building ,
Cnr Julius Nyerere Way and Nkwame Nkrumah Avenue
Harare, Zimbabwe
Landline : +263 75209/71
Cell : +263 772 249 059
E-Mail : [email protected]
Website : www.alliedtimbers.co.zw
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