General Beltings Holdings Limited has secured a US$50,000 bank financing facility to buy raw materials as suppliers tighten credit terms, exposing the cash-flow pressures facing local manufacturers.
The industrial group said suppliers had reduced credit facilities following a downgrade in Zimbabwe's credit risk, forcing businesses to make upfront payments for raw materials and putting pressure on production.
The challenge comes as the company seeks to fulfil orders while competing with cheaper imports and managing high local production costs.
In its half-year results for the six months ended June 30, 2026, General Beltings reported a 63 percent decline in profit to US$29,727, down from US$80,852 in the same period last year.
Revenue fell by nine percent to US$2.05 million, while gross profit declined by 24 percent to US$657,846.
The company also recorded a net cash outflow of US$188,337 from operating activities, compared with an outflow of US$806 in the corresponding period last year.
Cash and cash equivalents dropped to US$62,758 at the end of June from US$290,290 at the beginning of the year.
The US$50,000 facility from Stanbic Bank is intended to finance raw material purchases against customer orders, helping the company maintain production despite working capital constraints.
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The pressure is reflected in the group's production volumes, which fell by five percent to 420 metric tonnes during the half-year.
However, performance differed across its divisions. General Beltings recorded a 10 percent increase in volumes, supported by competitive pricing, while Cernol Chemicals registered a 14 percent decline following a slow start to the first quarter.
The company also warned that high local electricity, labour and utility costs were making locally manufactured products less competitive against cheaper regional imports.
The squeeze on working capital has wider implications for manufacturers that must pay for inputs before completing production and receiving payment from customers.
General Beltings said its 2026 strategic plan includes strengthening revenue through confirmed mining sector orders and improving access to external working capital facilities.
Management expects a stronger second half, supported by raw material availability and demand from mining, tourism and dairy.
The board, however, resolved not to declare an interim dividend, choosing instead to preserve funds for working capital and meeting product demand.
The company ended June with total assets of US$5.62 million and total equity of approximately US$2.84 million. Its current liabilities exceeded current assets by US$136,251, highlighting the pressure on its short-term finances.
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