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LISTED brickmaker Willdale intends to increase production by more than 100 percent following a US$3 million capital injection into the business by shareholders.
Construction projects, which have been increasing progressively, have of late added fillip to the business.
As a result, production volumes are forecasted to grow to 100 million bricks per year from the current 45 million bricks per a year, a 122 percent increase.
The increase in volumes is expected to compensate for the subdued demand that usually affect the rainy season (November, December and January).
Last year, the company sold more than 40 million bricks.
In an interview last week, Willdale chief executive officer Mr Nyasha Matonda said despite increasing competition from other industry players, the company’s balance sheet is expected to be healthy as demand for bricks by individual property developers is projected to be steady.
Various public and private infrastructural development projects are forecasted to be a boon to the construction sector in the medium to long term.
“Competition is stiff but we are gaining ground. Demand for bricks has remained strong, particularly from individual home developers, despite the national economic challenges,” said Mr Matonda.
Government continues to avail more land for development.
“There is talk of a new city and that is a huge project. Government is talking of over 100 000 houses just for Harare; even if you say a house needs 20 000 bricks, the total is two billion bricks.”
Willdale reported that revenues rose 24 percent to US$3,6 million in the five months to February 2015 compared to the same period a year ago.
Sales volumes also climbed 49 percent to 27 million bricks in the period under review.
Green and burnt production increased 7 percent and 25 percent respectively.
Green bricks are the wet bricks from the moulder.
However, production volumes are still below target due to erratic power supplies and seasonal disruptions through the rains.
Demand for bricks from corporates and Government has also remained low in the period under review.
The increase in production volumes will subsequently result in Willdale’s capacity utilisation increasing from the current 40 percent to 60 percent. This will not only improve the company’s revenue but also create employment. The average price for a brick is US14c.
“We are therefore confident of a positive profit position for the financial year ending September 2015 due to high volumes and reduced unit costs. The board will continue to explore various initiatives which will grow volumes, improve productivity, efficiencies and reduce costs,” added Mr Matonda.
Willdale is also actively looking for export markets that will help to increase sales and spread risk. Willdale was founded in 1957. It listed on the Zimbabwe Stock Exchange in 2003 following its demerger from Mashonaland Holdings Ltd. The company is the only brick-making publicly traded counter.
Willdale, which has 1,8 billion shares in issue, has a market capitalisation of US$3,2 million. On a year-to-date basis, the counter has lost 10 percent.
By close of trading on Thursday, Willdale’s share price was US0,18c.
Online Reporter