Harare – National Tyres Services (NTS), a retailer of new tyres and tubes, says it is optimistic of the future despite the prevailing foreign currency shortages which are posing serious challenges for the business sector.
The origins of the currency crisis can be traced back to August 2015 when Treasury passed the RBZ Debt Assumption Bill which involved the government assuming the RBZ Debt of over $1.4 Billion by issuing Treasury Bills (TBs). The objective of this debt assumption bill was to clean the RBZ balance sheet and allow the apex bank to resume its clearing role through the RTGS system.
In a bid to sustain government’s excessive expenditure in 2015, the central bank started crediting local banks with electronic balances (RTGS) which were not backed by tax revenues and Nostro foreign currency balances. As a result, broad money supply grew by over $1 billion in less than 12 months.
The result is a convoluted system of exchange rates, with consumers charged different prices depending on whether they pay in real dollars, electronic money or so-called bond notes, despite government insisting that all three have the same value. It however undermined that argument by saying that foreigners could still pay the old price for fuel of $1.32 a liter if they used cash dollars.
In an email interview with Equity Axis NTS Managing Director, Kennedy Mandevani without giving the actual numbers said sales volume for the start of 2019 exceed those realised in the same period in 2018 and the Company continues to stay close to the customer despite the turbulence in the market.
“The festive period was particularly good for business although 2019 has started on a quieter note. NTS has just completed the refurbishment of its flagship Cripps/Seke Road branch. The new look branch offers customer a world class tyre fitment experience second to none. NTS will extend this world class concept to all its other 12 branches nationwide.”
He added that the Company has also installed the SAP Enterprise Resource Planning system to enhance its ability to conduct complex business transactions and enhance customer service.
Meanwhile, many Zimbabwean manufacturers are closing down. The chief executive officer of Surface Wilmar, the biggest producer of cooking oil, said last week he had no choice but to shut the company because it couldn’t find the $6 million it needed each month to pay suppliers.
CZI head, Sifelani Jabangwe recently told reporters that manufactures are suffocating due to forex shortages and unless something happens urgently, the country will grind to a halt.
The nation’s biggest brewer, Delta Corp Ltd., which is 40 percent owned by Anheuser-Busch InBev SA/NV, struck a deal with the government this month to get more foreign exchange from the central bank for imports. In return, it pulled plans to reject payments in bond notes and electronic dollars, known as Real Time Gross Settlement, or RTGS.
Still, plenty of firms are offering discounts, sometimes of as much as 70 percent, if customers use real greenbacks.
The origins or roots of National Tyre Services Limited date back to 1926. In September 1969 National Tyre Services became a public listed company on the Zimbabwe Stock Exchange. It is the largest retailer in Zimbabwe of new tyres and tubes, (imported and locally manufactured). The other main activity is relugging of agriculture and earth moving tyres and the procurement of truck tyres for the Zimbabwe Transport Industry.
NTS has 13 retail outlets situated throughout the country with 4 of these being located in Harare.
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