- Lafarge annual Output to increase 614%
- New CE to explore regional markets
- New US$2.2 mill Turkish plant to extend Lafarge product offering
Listed Cement manufacturer, Lafarge Zimbabwe yesterday held a groundbreaking ceremony for an Expansion Project encompassing the construction of a US$2.2 million Turkish plant which is expected to ramp up the cement manufacturer’s output by 614%.
Lafarge’s current output is 7 000mt of cement per annum, with the new plant, output will surge to 50 000mt.
This comes after LafargeHolcim Group Regional Head for the Middle East and Africa made a courtesy visit to President Mnangagwa in May of 2019 and committed a US$25 million investment in Lafarge Zimbabwe operations. The investment is focused on the doubling of Cement capacity, tripling of Agricultural Lime capacity and automation of the dry motors plant.
Against the backdrop of persisting forex shortages in the economy, the project was also granted a National Project Status which means Lafarge is entitled to duty-free importation of temporary imports and capital equipment which are to be used under the project.
At the crux of Lafarge’s corporate governance is a concerning trend over the past 6 years where there have been reshuffles in the top management of the firm. Lafarge is under the leadership of a new CEO, Precious Nyika who assumed responsibility earlier this 2020, the third Chief Executive within 3 years.
In an exclusive with Equity Axis, Precious expressed intentions of doubling the size of Lafarge Zimbabwe by 2022 as well as explore regional markets. Of particular interest is the Zambian market where the LafargeHolcim group already has a presence with a strategy of complementing the Zambian counterpart whose main focus is cement by augmenting their product range with dry-mix mortar. Precious also mentioned a keen interest in exploring the Mozambiquan market.
In 2015, the company recorded a loss of US$1.9 million blaming the economic conditions in the country. In 2017, the Company registered a total loss after taxes of $0.61 million from a profit of $3.13 million in the prior year, a decline of 119%.
In 2018, the Company overturned the $0.61 million loss to record a profit of $1.3 million. The company swung to profitability in the six months to June 2019, recording a ZWL$2.9 million profit in the reviewed period from a ZWL$1.8 million loss in the same period the prior year. Revenue for the period went up 169% to ZWL$87.5 million in the period under review from ZWL$32.5 million in the same period in 2018.
The new plant will also extend the product offering for the cement manufacturer to include aggregates, dry mix mortars, paints, water-proofing compounds, agricultural lime, tile-grouts. This would potentially give Lafarge an edge over its competitors whose main focus is cement manufacture.
Lafarge is the closest rival to PPC which has a single plant in Zimbabwe located in Harare and has the capacity to produce 450 metric tonnes of cement per annum. In 2017, PPC commissioned a new plant in Harare which has an annual capacity of 700000 tonnes per annum, thus upping its game and increasing pressure on Lafarge which has been the dominant supplier in Harare.