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Michael Tome
Business Reporter
THE late resumption of Lafarge Cement’s mill, which briefly stopped operations following plant collapse in October last year, led to a 55 percent decline in the firm’s first quarter volume output.
Lafarge Cement restarted operations at the plant in February 2022 following the cement mill house roof collapse in a development that halted the production in the intervening period.
The cement maker’s situation was worsened by the decommissioning of one of the existing cement ball mills to make room for the installation of the new Vertical Roller Mill (VRM).
Consequently, the stifled cement production led to a 23 percent dip in dry mortar product volumes compared to the same period last year.
The adverse impact of the mill house roof collapse on cement volumes, impacted the company’s earnings as Lafarge’s revenue declined 18 percent on inflation-adjusted terms compared to the first quarter of 2021.
Despite going through a rough patch towards the end of 2021 Lafarge remains optimistic about buoyant operations going forward.
“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.
“The company is confident that volumes will recover and grow as the availability of cement stabilises, especially after the new VRM (Vertical Roller Mill) start-up in the second quarter,” said Lafarge in its quarterly trading update.
A VRM is a type of grinder used to grind materials into extremely fine powder for use in mineral dressing processes, paints, pyrotechnics, cement, and ceramics. It is an energy-efficient alternative for a ball mill.
According to Lafarge, the first quarter of 2022 was characterised by a more relaxed Covid-19 lockdown environment compared to the same period in 2021.
This created a good operating atmosphere for business as it created room for improved trading hours given the gradual return of employees to the office after two years of working remotely.
On the flip side, the cement maker indicated that it continues to face challenges in securing foreign currency for the timely replacement of its critical spares that are sourced off-shore.
“Foreign currency allocations through the auction market have been significantly below the company’s requirements. As a result, foreign currency obligations have become increasingly difficult to meet and sustain,” added Lafarge in the quarterly update.
The Zimbabwe Stock Exchange dirm has hinted at proceeding with its US$25 million three-pronged investment plan which saw the installation of alternative power infrastructure in 2020.
In 2021 Lafarge successfully commissioned its automated dry mortar plant, which was the second project, which leaves the company with the Vertical Cement Mill project.
The investment is expected to double the cement firm’s capacity after the anticipated commissioning in the second quarter of the current financial year.
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