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Enacy Mapakame
Agriculture and mining implements maker, Zimplow Holdings Limited, is focusing on manufacturing expansion as it seeks to meet product demand for the export market and enhance its foreign currency earnings.
Group chief executive officer, Vimbayi Nyakudya, said the group relies heavily on foreign currency, at a time access to it remains limited in the country, thus creating scope for strategies to tap into the export market.
“Our business relies on foreign currency, therefore product development is very critical,” he said responding to questions on the sidelines of the group’s analyst briefing.
During the past financial year, Zimplow’s export business grew by 35 percent, which Nyakudya said helped sustain the group in terms of foreign currency needs.
Now, the group is looking at further expanding its export market to boost earnings.
“We work with mines and these are already in the export business, but we are looking at increasing our customer base on the export market in order to boost foreign currency earnings,” he said.
Among the initiatives put in place are the launch of new businesses that are also expected to offset the impact of the discontinuation of the CAT dealership. Last year Zimplow announced Barzem would exit the CAT distributorship on September 30, 2022 on the back of the changes in the strategic direction by both the supplier and the group.
According to Nyakudya, the initiatives entail the launch of Valmec and Tractive Power Solutions (TPS), while the group has also increased resources allocation into Scanlink and Trentyre unit to boost performance and overall contribution to group.
At Mealie Brand, the group is working on capacity expansion with a new manufacturing plant expected to further boost production output and efficiencies.
“We are adding new equipment for Mealie Brand, it will not only improve our current production of animal drawn implements but also improve capabilities in terms of engineering of tractor drawn implements and various mining consumables. So this is capacity we are giving ourselves which we have not had before,” said Nyakudya.
At Mealie Brand, exports drove volume growth for the financial year 2022. While the domestic market went down 16 percent, exports increased by 36 percent and the group is upbeat of maintaining this growth momentum in exports.
According to the group, this division is modernising and boosting production capacity to better suit the mechanisation demands of small and medium-sized farms, and the debut of the 2-wheel tractor shows its unique solutions.
Overall, management at Zimplow is upbeat of an uptick in earnings performance and even surpassing the pre-CAT exit on the back of the several initiatives the group is undertaking.
“Overall if you look at our top-line performance, we had a 6 percent growth so the initiatives we put through to ameliorate the impact of Barzem worked although the impact of provisions left us in a loss position
“But since these are once off provisions, we should be able to see Zimplow back to the performance we are accustomed to,” he said.
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