HARARE, August 25 (The Source) – National Tyre Services (NTS) says a ban imposed on imports has led to increased sales volumes for new tyres, boosting the tyre maker’s income.
On June 20, Zimbabwe banned the importation of hundreds of items under Statutory Instrument 64 of 2016 to reign in on its ballooning trade deficit — $3,3 billion in 2015 — and shore up local manufacturers.
NTS managing director Kennedy Mandevani told shareholders at the annual general meeting that the company has also managed to reclaim its market share as people are now opting for new tyres, especially its budget brands.
“The Statutory Instrument impacted on us in two ways which has seen increased demand for brand new tyres while the Re-treading business, though now requiring a permit to import rubber that we use for re-treading, the license is easy to get and has been an advantage,” he said.
Mandevani said the cheaper new tyres under the Budget Brands will continue to expand as it has made significant contribution to volumes.
The company had also negotiated for price reviews with suppliers and this has already started to impact on costs.
“We went to major suppliers and negotiated favorable terms and on this, the supply chain has become a key factor on price reductions and we have managed to reclaim market share,” he said.
Mandevani said the company will consider making further price reductions to benefit the customer and in turn maintain volumes and market share.
He said though the economy is expected to remain subdued, cost containment will remain a major factor in the business.