Climate change impacts Zimplow demand

Sikhulekelani Moyo, Business Reporter

FARM implements manufacturer, Zimplow, says the crippling dry-spell due to climate change has resulted in a 26 percent drop in demand for its Mealie Brand small-scale farming equipment during the first-half of 2022.

In a latest statement accompanying half-year financial results for the period ended 30 June 2022, Zimplow said the prolonged dry spell, which persisted in the second-half of the 2021/22 season induced a negative strain on demand for Mealie Brand products.

“The dry spell that persisted in the second-half of the 2021/22 season had an impact on the demand for Mealie Brand products due to reduced yields by users of these products who are ordinarily dry land farmers,” Zimplow chairman, Mr Godfrey Manhambara, said.

“Animal drawn implements volumes declined by 26 percent against the comparative period.”

He, however, said the volumes for spares in the local market were pleasing with a 35 percent growth against the same period last year as farmers sought to apply reduced disposal incomes on equipment maintenance rather than replacement.

As part of measures to ease climate change impact, the Government has introduced a climate smart agriculture model called, Pfumvudza/Intwasa, a conservation farming method aimed at improving production for 1,8 million households of small-scale farmers across the country.

Despite the drop in volumes for the small-scale farmers equipment, Zimplow recorded 24 percent revenue growth during the period under review.

“The group recorded growth in revenue of 24 percent compared to the prior year driven by positive operational performance and volumes growth in key segments of the group.

“Profitability was 64 percent ahead of prior year supported by a 12-fold increase in exchange and fair value gains,” said Mr Manhambara.

The group also said it is pushing ahead on its commitment to the mining and infrastructure equipment sector and will soon introduce a new corporate brand to service the market’s earth moving equipment needs in line with customer’s expectations.

“Given the group’s focus on realigning the company’s structure to a new OEM for earth moving equipment, realignment of working capital cycles, as well as the need to reduce exposures to borrowings and foreign liabilities following the monetary policy measures, the board has decided not to declare an interim dividend,” said Mr Manhambara. — @SikhulekelaniM1