Chronicle Editor
Business Reporter
LAFARGE Cement Zimbabwe is repositioning itself for growth following the complete restoration of the collapsed cement mill roof and the business now expects to tap into the on-going Government infrastructure projects.
Last year, the company suffered a critical on-site incident involving the collapse of the roof over one of its major cement mills located in Harare.
This negatively affected production resulting in cement volume decline of 55 percent versus the same period last year, the firm’s first-quarter trading update shows.
Sales volumes also took a knock, piling pressure on cash flows in the process hindering the firm from fully meeting its cash obligations.
“The company saw a cement volume decline of 55 percent versus the same period last year.
“This is attributable to the startup mode as the cement mills were restarted in February following the collapse of the cement mill roof in October 2021,” chief executive officer, Mr Geoffrey Ndugwa, said.
The temporary stoppage in production resulted in a backlog of pre-paid orders that needed to be satisfied before the resumption of normal market supplies.
However, while the roof repairs were taking place, the company continued to produce clinker, manufacture dry mortars and expand the retail franchise code-named Binastore.
In addition, Mr Ndugwa said one of the existing cement ball mills was decommissioned to make way for the installation of the new Vertical Roller Mill (VRM) that will double the company’s capacity after commissioning in the second quarter.
That will double the company’s cement production capacity and improve the availability of raw material to the new DMO plant, he said.
While the firm angles for a rebound, Mr Ndugwa said they are buoyed by ongoing Government construction projects countrywide.
The cement firm is also encouraged by the positive trajectory of the economy and anticipates that collaborative dialogue between Government, industry, and other stakeholders will be maintained in order to restore and safeguard business confidence as well as preserve value and restore macroeconomic stability.
“The company is confident that volumes will recover and grow as the availability of cement stabilises, especially after the new VRM start-up in Q2,” said the company.
“The overall market demand continues to grow driven by the segment of individual home builders as well as the ongoing major Government infrastructure development projects.”
Despite the adverse impact of the cement mill house roof collapse on cement volumes, the company’s historic revenue grew by 36 percent versus the same period last year and declined by 18 percent on inflation-adjusted performance, the trade update shows.
Under the Second Republic, which came into being in November 2017, the Government has, among other fundamentals, prioritised infrastructural development to promote economic growth and development in line with Vision 2030, where an upper-middle-income economy status is targeted.
Over the years, the Second Republic embarked on various infrastructural development projects that include Kariba South Hydropower Station expansion project, the US$1,4 billion Hwange Thermal Power Expansion project, and the Lake Gwayi-Shangani investment.
Other massive infrastructural development projects such as the Bulawayo-Beitbridge Highway rehabilitation project are also ongoing.
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