Turnall, one of Zimbabwe’s biggest building materials, is changing hands after new investors bought NSSA’s 32.55% stake in the company.
Mega Market owns 17% of Turnall. Zimbabwean Brands, an associate of Mega Market, bought the NSSA stake in June. This means the two associated companies now jointly hold a combined 49.59%. Zimbabwean Brands will now make an offer to smaller shareholders to buy them out.
Run by 36-year-old entrepreneur Shiraan Ahmed, Mega Market distributes a wide range of consumer productions from its warehouses in Mutare. It will now make a huge leap forward by taking control of one of Zimbabwe’s biggest players in construction.
NSSA’s Turnall disposal is part of a sell-off that the pension fund announced in 2021, under which it would also sell its interests in First Mutual Limited and mortgage lender National Building Society to “refocus” its vast investment portfolio.
At Wednesday’s closing price on the ZSE, the NSSA stake was worth Z$674 million, or US$1.6 million at the official exchange rate.
Turnall is one of the country’s biggest manufacturers of building materials, making roofing materials, asbestos pipes and other products. The company last year profited from government projects. But Turnall reported slower business in the first quarter of 2022 as liquidity shortages and low disposable incomes weakened demand.
In an interview with newZWire, Shiraan says fresh capital can help Turnall meet its potential.
“Roof sheeting is the core business of Turnall. It’s a requirement for every household, hence the demand is firm. Whilst Turnall has had its cash flow issues as well an old machinery, its brand has remained strong and it has maintained its market leader position. We believe with adequate capital injection it is a good business in the long run. We also see opportunity in growing the product range in the same distribution channel,” Shiraan says.
The strategy for Turnall will be to boost capacity and control costs.
“The plan is to invest in new machinery to increase capacity and also bring cost of production down. Also, to explore upstream opportunities to secure supply of raw materials as well as bring raw material prices down.”
Shiraan’s tips for young entrepreneurs
According to Shiraan, Mega Market started out as a family retail business on Main Street in Mutare. The company then expanded into a larger warehouse in the Nyakamete industrial area of Mutare, taking over a complex previously owned by COTTCO.
Shiraan grew up in Mutare and went to school at Hillcrest. He studied Economics at Rhodes University, before returning home to run the family business.
Mega Market is close to completing the construction of a US$25 million 90,000 metric tonnes per annum flour mill in the city. The company is also the second largest shareholder in Meikles Africa, with 9.86%.
How can young entrepreneurs running businesses in the tough Zimbabwean environment stay above the water?
Shiraan’s advice: “Work hard. Control your expenses. Invest and focus on your business. Whilst it is important to understand the macroeconomic environment to identify risks and opportunities, it is critical to remain focused on your business. Be positive, there are risk and opportunities in every environment. The critical thing is to be able to mitigate against the risk and seize the opportunities given the existing environment.”
He has another tip that some may not like:
“Also another point to young entrepreneurs. Please don’t buy cars. It’s the worst investment with a negative return. The time will come, you need to be patient. Invest all your cash flow and time into your business.”