Mealie Brand reduces cost of its ploughs by 23%

Judith Phiri, Business Reporter

WITH the onset of the rainy season and the intensifying of cropping throughout the country, farm implements manufacturer, Mealie Brand, a division of Zimplow Holdings Limited, has reduced the cost of its plough by 23 percent.

This comes as management at Zimplow, a diversified supplier of agricultural, mining and infrastructure equipment listed on the Victoria Falls Stock Exchange, expects further efficiencies to ensure successful uptake of Mealie Brand products both locally and in the region.

In a trading update for the third quarter ended 30 September, Group company secretary, Mrs Sharon Manangazira said the onset of the rainy season has brought about a higher level of positivity across the economic sectors that the Group operates in.

“Increased liquidity from wheat deliveries and timeous Grain Marketing Board (GMB) payments in the agriculture sector should lead to increased business volumes. Mealie Brand has successfully reduced the cost of its plough by 23 percent, and Management expects further efficiencies to ensure successful uptake of Mealie Brand products both locally and in the region,” she said.

“The Group is undergoing a transformation to effect greater service levels at more competitive prices in an effort to regain market share in the business-to-business sector against the emerging informal sector. Stock levels are generally good and the sales pipeline is healthy across all Group business units.”

She said Powermec continues to position itself to take advantage of the current power deficit in the provision of both solar products and generators, while management believes the current power deficit will continue up to April 2025.

Mrs Manangazira said the response by the market to Develon earthmoving equipment has been very encouraging, leading to the sale of all available stock.

She added: “Tractive Power Solution’s order book is strong for the remaining quarter of 2024. Scanlink has a strong order book to year end, spilling over into first quarter (Q1) 2025 with the supply of intermediate and luxury buses headlining.”

In terms of financial performance, Mrs Manangazira said in the period under review, the Group recorded revenue amounting to US$20.6 million, which was 12 percent below that for the comparative period last year.

She said this performance, although below prior year, improved in the period under review with most business units showing a positive trend towards profitability from the commencement of the third quarter, against the backdrop of a loss before tax of US$1.4 million as at 30 June 2024.

“It is expected that the effects of the drought will be felt for at least another twelve months in the agriculture sector and will be exacerbated by the shortage of power and increased costs of production. All the above-mentioned factors and softer mineral prices, except gold, have cumulatively contributed to a lower than forecasted financial performance by the Group.”

Mrs Manangazira said Mealie Brand implements local sales volumes were 48 percent below those for the same period in 2023 whilst the export sales volumes recorded a 57 percent negative variance in comparison to the same period in 2023.

On Farmec, she said total revenue was 3 percent below previous year with implements sales 12 percent ahead of the comparative period last year whilst tractor unit sales were 4 percent below the 2023 third quarter volumes.