Matsiloje Cement in six-year loss making streak
Chakalisa Dube | Friday July 17, 2015 13:10
MPC is a 100% subsidiary of Nortex Textiles.
The company’s managing director, Mukesh Josh told Businessweek in an interview that the company lost P13 million in its six years of operation.
“Early this year, we closed our section which manufactured some raw materials we used to produce cement and retrenched 96 employees remaining with 56. Now we are buying the raw materials (they stopped manufacturing) because at the moment it appears cost effective,” he said.
Despite retrenching the workers, Josh maintained that the company is still producing 50 tonnes of cement a day.
“We only retrenched to bring down the costs of production, which were spiraling out of control.”
According to him, the company should yield an annual profit in the region of P10 million in a normal business environment.
He explained that big South African firms are the main reason the MPC is not doing well.
“They (SA cement firms) are facing low demand of their products in their home country and they have crossed to Botswana. The trend has been like this in the last six years.”
“The increase of companies that sell cement has resulted in less demand thus causing prices to go down.
Their (SA firms) presence has really resulted in prices being less attractive. This is despite increasing costs of production over the years,” highlighted Josh.
The MD said there seem to be little protection by the government against big SA firms.
MPC mostly sell its products to local companies that market building materials.
“We however sell a less significant portion of our cement to Bulawayo firms. We do not have plans yet to sell extensively to other countries because of high transport costs,” he said.
Despite the company not doing well, Josh says that he is not throwing in the towel yet. “In business, one has to be patient and avoid acting impulsively when things are not going well.
“One day the storm will pass and the business will start doing well. Unless something catastrophic happens that is when we can close the firm,” he says with optimism.
In 2009, Nortex bought MPC through auction. Nortex invested P40 million in rehabilitating the cement plant and funding the start of production.