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Cement producer, Lafarge, on Monday said there has been a high demand for the product which is outstripping supply on the market since the re-opening of the economy with the lifting of Covid-19 lockdown restrictions.
In its third quarter update, the company said it had registered record sales in the month of July, the highest for the same month since July, 2003, with overall sales having increased by seven percent compared to the same period last year.
“Demand for cement in the construction sector increased by 34 percent ahead of second quarter following the re-opening of the economy after the Covid-19 induced national lockdown,” Lafarge chairman, Kumbirai Katsande said.
“As business activity progressively continued to gain momentum into third quarter, the demand for cement consequently outstripped supply causing considerable supply backlog.”
Lafarge exceeded set gross profit targets.
“The business remains profitable,” he said, adding the improvement in foreign currency supply with the introduction of the auction system in July had led to price stability and also afforded the business to meet its foreign obligations.
“The anticipation is that there will be a continued benefit from the current stability in the exchange rate assuming there is strict control of money supply,” he said.
In the last quarter of the year, associated with rainfall, demand will taper, he said.
Management of a potential second wave of the Covid-19 was key as it could again impact on business activity, he said. – New Ziana
Bongani Ndlovu