• Zimplow has completed the acquisition of Barzem, establishing full ownership
  • The acquisition of Barzem aligns with Zimplow's strategic goals, allowing the company to tap into the growing demand for earthmoving and heavy mining machinery in Zimbabwe's booming mining industry
  • With the integration of Barzem, Zimplow gains access to a wider range of equipment and technologies, strengthening its market presence and enabling enhanced services to clients in agriculture, mining, and construction

Harare- Zimplow Holdings Limited, a leading manufacturer of agricultural products, has successfully completed a takeover of Barzem, acquiring 49% of the company's shares and making it a wholly owned subsidiary.

This acquisition has been further strengthened by securing a distributorship agreement with Develon, a mining infrastructural equipment provider.

As a result, the company is preparing to relaunch under a new name.

The decision to acquire Barzem was prompted by the discontinuation of Barzem's Caterpillar (CAT) dealership, which was a joint operation with Barloworld. This discontinuation had a negative impact on Zimplow's overall performance for the full year of 2022.

Consequently, Zimplow had to buy out Barloworld's stake in the business, which has since transitioned to Tractive Power Solutions (TPS). This strategic move is expected to drive the performance of TPS, which was established to provide earthmoving and heavy equipment solutions to clients.

Zimplow specializes in the manufacturing and distribution of agricultural equipment, mining supplies, and various engineering solutions. The company owns several units including Farmec, Mealie Brand, Valmec, CT Bolts, TPS, Powermec, Scanlink, and TrenTyre. Given that mining contributes nearly 60% of both exports and revenues, the complete takeover of Barzem is seen as a strategic move by Zimplow. Barzem is involved in the earthmoving and heavy equipment industry, and by fully integrating it into its operations, Zimplow will expand its footprint in the construction, mining, and infrastructure sectors.

This expansion is expected to have a positive impact on the operations of TPS, which was established in late 2022 to provide earthmoving solutions. Zimbabwe's economy heavily relies on mining, particularly gold, PGMS, and lithium. The country is a major global producer of PGMs, specifically platinum, ranking second in the world. Both lithium and PGMs play a crucial role in the production of electric vehicles (EVs) and battery electric vehicles (BEVs). Zimbabwe's significant presence in lithium and PGM production positions the country to contribute to the global shift towards cleaner and more sustainable transportation solutions.

With the growing mining industry in Zimbabwe, there is an increasing demand for earthmoving and heavy mining machinery. This presents a favorable opportunity for Zimplow, as the majority owner of Barzem, a reputable supplier in the industry. To capitalize on this situation, Zimplow should aim to secure substantial contracts with construction companies and the government for the rental and purchase of these machines, while maintaining a competitive pricing strategy.

The mining sector is expected to experience substantial growth and make a significant contribution to Zimbabwe's gross domestic product (GDP). The government's economic growth strategy places a strong emphasis on the mining industry as a key driver of economic development.

The acquisition of Barzem is also particularly important due to the current boom in the construction sector. The government has undertaken numerous infrastructure projects promised during the 2018 elections, many of which are still ongoing not to mention 2023 ones. There is a growing demand for road rehabilitation and construction projects, as Zimbabwe's roads are largely in a deteriorated state. Additionally, the government's focus on boosting agriculture through irrigation techniques has led to the construction of dams.

Apart from government initiatives, there has been a surge in housing construction led by private companies such as Mashonaland and FBC Holdings. All these construction projects require earthmoving machinery, creating an opportunity for Zimplow as a reputable supplier to meet the demand. The shortage of cement in the third quarter of 2023, which led to the government proposing free imports of the commodity, further highlights the ongoing construction activity and the potential for increased demand for construction machinery and equipment.

With the complete takeover of Barzem, Zimplow’s revenue will grow significantly, thereby strengthening its bottom line. This acquisition allows Zimplow to expand its product portfolio and solidify its market position. By incorporating Barzem, Zimplow gains access to a wider range of equipment and technologies, enabling the company to provide enhanced services to clients in the agricultural, mining, and construction sectors. This expanded offering allows Zimplow to meet the diverse needs of its customers and strengthen its presence in the market.

Therefore, the acquisition of Barzem strengthens Zimplow's position in the earthmoving and heavy equipment sector, aligning it with the surge in mining investments and infrastructure projects in Zimbabwe.