Source funds internally, President urges firms

Source: Source funds internally, President urges firms | The Herald June 7, 2019

Source funds internally, President urges firmsPresident Mnangagwa and Environment, Tourism and Hospitality Industry Minister Prisca Mupfumira (right) being shown boards and timber by Allied Timbers sales manager Mr Hurbert Mutyava during the commissioning of a doors and boards plant in Harare yesterday

Zvamaida Murwira Senior Reporter
Government is committed to supporting turnaround efforts by entities through the creation of a conducive investment climate which ensures viability and guarantees security of investment, President Mnangagwa has said.

He implored firms to pursue capital injection through internally-mobilised resources instead of focusing on borrowing as the only option.

President Mnangagwa said this yesterday while commissioning a US$125 000 state-of-the-art production plant at Allied Timbers.

“Credit finance is not the only option for capital injection. Business models and strategies must be developed and interest-free capital internally generated for expansion and growth of our entities. As Government, we will continue to support turnaround efforts through the creation of a favourable trade and investment climate which steers profitability while guaranteeing security of investment and ensuring sustainable jobs,” said President Mnangagwa.

“As Government we will support the business community by enacting new policies and realigning old ones to meet new business demands and evolving trends. This development indeed resonates with our Transitional Stabilisation Programme (TSP) which calls for the innovative revival of the manufacturing sector through value addition and beneficiation. I applaud Allied Timbers for taking advantage of the ease of doing business reforms to reclaim its strategic position as an important player in the timber industry. This is commendable.”

He commended Allied Timbers for procuring the plant through internally mobilised resources.

“It is commendable that the equipment we are commissioning today will enable Allied Timbers to provide the much sought after cabinet timber products, currently being imported. The fact that the equipment was wholly internally financed from proceeds generated after exports, shows the financial ingenuity and resourcefulness by the board and management. I challenge other parastatals and private entities to emulate this example and seek more innovative ways to recapitalise and retool their entities,” said President Mnangagwa.

He warned Allied Timbers to observe good corporate governance for it to prosper.

“With the introduction of this plant, it is clear that Allied Timbers will be back on the recovery path once again. However, for the recovery to be sustained, I urge the board and management to uphold good corporate governance and observe best management practices which allow the company to flourish.

“History must not repeat itself with regards to how the company is run and performs. I have no doubt that this plant presents huge growth potential which will continue to create jobs along the entire timber value chain industry,” he said.

Allied Timbers has of late been dogged by allegations of financial mismanagement which saw some of its management before arraigned before the courts of law.

He warned illegal settlers from invading plantations belonging to Allied Timbers in Manicaland province, saying relevant Government arms and Ministries should ensure that no settlement occurred in those areas.

Environment, Tourism and Hospitality Industry Minister Prisca Mupfumira said the strategic importance of Allied Timbers to the Government derived from its key mandate of assuring the country a sustainable supply of timber resources into the future.

“Due to capitalisation constraints, Allied Timbers is currently highly dependant on contract millers who are contributing about 70 percent of the company’s total pine sawn timber production,” said Minister Mupfumira.

The event was attended by Industry and Commerce Minister Mangaliso Ndlovu, Harare Provincial Affairs Minister Oliver Chidawu and Minister of State for National Security Cde Owen Ncube, Allied Timbers board chairperson, Mr Itai Ndudzo and acting chief executive officer, Mr Willcort Dzuda.