Harare- Lafarge Cement Zimbabwe Limited remains hopeful in terms of beating the pressures of the current economic environment despite a 19% decline in the year to date cement consumption per capita recorded in the third quarter compared to the same period last year.
In a trading update for the period under review, the company said it sees opportunities in the growth of the construction sector beyond 2020 and in this regard, it has successfully concluded financing arrangements for a US$15 million facility to fund expansion of its cement milling capacity and the Dry Mortar Mix (DMX) plant.
To deal with the incessant power cuts that have riddled the country due to shortages, Lafarge says it has embarked on alternative power supply to supplement ZESA generation as part of their expansion efforts.
This comes after the company’s production output recorded a 1% decline due to unplanned stoppages and power supply challenges, factors which also negatively affected the production of other businesses in the country.
Lafarge says it has rolled out the CAPEX expansion program and the power generating unit is now on-site while the DMX plant is being manufactured and work on the cement milling expansion project will commence in January 2020.
In addition, the company says it is actively engaging the Reserve Bank of Zimbabwe to conclude the registration of its external shareholder loan of USD28.5 million and expect to conclude the matter before the end of the 2019 financial year.
On the outlook, the company plans to focus on driving for operational improvements with the aim of improving cash generation and managing their costs.
The company believes that its portfolio provides a strong platform and foundation from where growth and value extraction can be derived in future, particularly when the trading environment improves.
Lafarge’s biggest rival, PPC Zimbabwe recorded a 35% decline in sales volumes in the half year period ended 30 September 2019.
This indicates the impact the hyperinflationary environment in the country has had on the construction industry as more people do not have much to spend on that due to erosion of income.
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