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Zimbabwe Stock Exchange-listed Lafarge Cement is diversifying its product portfolio due to a decline in cement demand on the local market, a company official said.
Lafarge finance director Mr Farai Mata-nhire said demand for cement has declined largely due to the current liquidity crunch.
“The third quarter is usually our peak demand period but demand is low. The volumes are not at the level that we anticipated although the demand is still there,” he said.
Mr Matanhire, who was speaking on the sidelines of the official commissioning of a homestead in Murehwa by the company on Tuesday, said they had since boosted their paint manufacturing business as part of the diversification.
“There are a lot of projects that we have embarked on we have already increased capacity in terms of our paint manufacturing business.
This is a business that we were not really focusing on before as our main focus was on cement,” he said.
Mr Matanhire added that they were also focusing supplying aggregates (material such as sand or gravel used with cement and water to make concrete, mortar or plaster) to the construction industry and line to farmers.
“The demand has been on the softer side but we are aware of a number of construction projects that are on hold due to funding issues and we believe once things start happening demand would actually go up,” Mr Matanhire said.
Despite the diversification, Mr Matanhire was optimistic that demand for cement will pick up again. Lafarge has in the past five years injected about US$25 million into its plant upgrading exercise, a move that is aimed at boosting the company’s operations while easing product supply.
In a statement accompanying the company’s results for the year ending September 2013, Lafarge chairman Mr Muchadeyi Masunda said he was optimistic that the company’s performance would improve as a result of measures being implemented.
Lafarge said that the statement of the group’s financial position reflects favour-able current asset position largely because of an increase in raw material as the company increased production capacity.
“Following the successful implementation of various cost reduction exercises, profitability is expected to improve in the second half of the year,” he said.
Online Reporter