Online Reporter
Business Reporter
ZIMBABWE’S unprecedented construction boom, driven by demand for housing, a rush towards hard assets and national infrastructure projects, is creating a significant multiplier effect, directly triggering a massive wave of investment across its industrial supply chain.
Lingering fears over inflation and currency volatility often drive investors to seek refuge in dollar-denominated assets like real estate.
Further, the dollarisation of transactions in construction and real estate sectors facilitates these large-scale investments.
Analysts suggest the massive capital injections are fundamentally repositioning supporting industries — including cement, steel, bricks and aggregates — as key engines of economic growth.
Private home construction, entrepreneurial ventures driving the development of new industrial complexes and warehouses and robust Government spending on roads, dams and various other infrastructure projects have led to a highly active construction sector in Zimbabwe.
The environment, where investors are recognising significant potential in real estate, has created huge demand for building materials, triggering a wave of investments in the supply chain.
In the cement industry, for example, shortages, largely resulting from frequent operational issues at existing plants such as those run by PPC and Khayah Cement, made the market highly attractive for new, large-scale players.
The flagship development is the planned US$1billion Whi-Zim International cement plant in Magunje, Mashonaland West province.
The project is envisaged to produce enough cement to cover domestic shortfalls and position Zimbabwe as a net exporter.
Critically, the scope of the project includes a dedicated 100-megawatt captive power plant that will supply the operation.
Overall, heightened activity in the sector also includes the US$70 million Shungai Investment plant in Chegutu and new facilities being built by major international players like Huaxin Cement, all aimed at boosting output.
Hima Cement, the East African producer owned by Uganda’s Sarrai Group, has emerged as the leading bidder to acquire Khayah, which is currently under corporate rescue.
The potential acquisition follows Sarrai’s earlier purchase of Hima Cement from global giant Holcim, as the latter divested from several African markets, including its former subsidiary in Zimbabwe.
Zhingjin Heli Energy 5 Miles Industrial Park reportedly also has a cement factory that “produces 500 000 tonnes of cement per annum, while the coking plant produces high-quality coke for the steel industry”.
“The sheer visibility of foreign (cement) brands, particularly those from Zambia, despite the protective 30 percent import tariff, is a clear indication of the significant potential within Zimbabwe’s cement industry,” said Mr Fanuel Musakwa, who runs a local construction company.
‘‘I believe the current appetite for building in Zimbabwe is nowhere near its peak, largely due to the high costs compared to other regional countries. This, in itself, demonstrates the immense potential the country holds for investors, not just in cement but across the entire supply chain.”
Tied to the huge investments in the cement industry, the massive demand for bricks and aggregates has spurred a parallel modernisation drive.
Boon for bricks
The brickmaking sector has seen rapid, targeted investment, much of it backed by Chinese capital, to introduce modern, high-capacity and automated plants.
The investment has effectively allowed the brick industry to scale up its operations quickly, replacing outdated processes with efficient technologies capable of meeting strict quality and delivery timelines.
Similarly, the demand for quarry products — crushed stone, sand and gravel — required for large-scale civil and residential works has led to substantial investment in modern aggregate plants and heavy quarrying machinery, securing the foundational inputs for all construction work. This segment of the industry has, however, drawn criticism, with operators often cited for poor management practices and their role in causing severe environmental degradation.
The construction momentum has extended to the steel and fabrication industries, creating strong forward and backward linkages within the value chain, analysts say.
They have noted that while large-scale, primary steel production remains a complex undertaking, the immediate boom has successfully directed capital into steel recycling and secondary manufacturing.
