Lafarge plant breaks down on lack of forex for spares

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    HARARE – Zimbabwe’s second largest cement manufacturer Lafarge Zimbabwe said it suffered significant downtime during 2018 due to plant outages which consequently impacted volumes performance.

    The company said demand for cement was very strong in the period driven by increased disposable income emanating from a good agriculture season coupled by increased financing options and improved mortgage terms by financial institutions.

    Despite the firm demand the period was characterised by unplanned plant down time due to major breakdowns which subsequently slowed down supply.

    According to Lafarge, worsening foreign currency shortages, as the year progressed, resulted in delays of up to six months to replenish critical spares for the plant and to import raw materials.

    Lafarge Zimbabwe operates a 450, 0000 tones per year plant which is the country’s third largest. PPC is the market leader with a combined plant capacity of 1.4 million tonnes per year.

    Although Lafarge did not give specific volumes variance, it follows that a significant push to its topline was attributed to price adjustments in the later part of the year as local costs shot up.

    Despite the supply constraints, Lafarge went on to report a revenue growth of 24% to $72.3 million for the 12 months period to December 2018, which was attributed to average price adjustment following adjustments in the final quarter of the year as well as a favourable sales mix skewed in favour of higher strength cements.

    On the outlook, Lafarge said it expects demand for cement to remain firm into 2019 as housing remains the only stable investment to lock value against inflation.

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