NTS devises strategy to escape Covid-19 impact
ZIMBABWE Stock Exchange listed National Tyre Services Limited (NTS), says its focus area going forward will be ensuring business viability despite the economic uncertainties caused by the Covid-19 pandemic.
The company pins its hopes on strategies such as cost control measures, the foreign currency auction system, avoidance of loss of capital against inflationary pressures as well as uninterrupted supply chain. This comes as natural disasters have caused serious supply chain disruptions for the company.
In a trading update for the quarter to December 31, 2020, company Secretary Stewart Mandimika, indicated a challenging trading environment due to disruptions caused by among others things, the Covid-19 induced lockdowns and the subsequent restrictions to movements.
In addition to that, bad weather also had an adverse impact on unloading of goods in Mozambique.
“The Covid-19 pandemic continued to affect operations in Q3 2020/2021. South
Africa recorded a new wave of coronavirus, forcing level four lockdown measures to be implemented. This resulted in serious delays of stock movement across the border.
“Movement of stock into Zimbabwe was further curtailed by cyclones that delayed berthing of ships at Beira with stocks from China and India. The market experienced noticeable stock outs particularly in December 2020. Locally, critical demand for forex to import essential requirements including Covid-19 testing kits, vaccines and raw materials, weighed in,” he said.
Despite these challenges, NTS recorded a significant volume performance during the quarter under review driven by increased demand for Agricultural related tyres.
Mandimika indicated that overall, volumes for the quarter increased by 99 percent to 52 608 compared to the same period last year, despite the challenges faced.
NTS attributed this growth mainly to effective marketing initiatives and availability of stock. The volume of new tyres sold during the period under review increased by 213 percent compared to same period in the prior year as the company continued to implement robust marketing strategies to promote sales complemented by good stock availability.
Tubes volumes rose by 69 percent to 1 683 while accessories jumped by 138 percent.
During the period under review, re-treading volumes went up by 21 percent compared to same period in the prior year due to focused key account management effort to retain strategic fleet customers. Mandimika added that services category volumes were 87 percent above same comparable prior year period driven by good service delivery to customers.
“Overall, 2020/2021 YTD 31 December 2020 volumes have increased by 28 percent compared to same period last year mainly due to stock availability and marketing effort to push sales,” said Mandimika.
In the outlook paid, the Covid-19 pandemic effects are expected to subside as infections continue to come down due to the rollout of vaccines while the anticipated good agriculture production is also expected to boost disposable incomes which will be an advantage for local industry.