• Willdale is reallocating capital from divesting non-core real estate assets to fund a $3.5 million all-weather production facility aimed at modernising its brick-making operations
• The company reported a dramatic 48% decline in revenue, resulting in a fourfold increase in net losses
• This was primarily due to low working capital and outdated production capacity
• Willdale faces intense competition from both formal and informal market players

Harare- Willdale Limited, Zimbabwe’s sole publicly listed brick manufacturer, is divesting non-core real estate assets to fund a $3.5 million all-weather production facility and modernised brick-making equipment.

This capital reallocation aims to address the inefficiencies of its outdated production infrastructure, which has failed to sustain output in an increasingly oligopolistic market with intensifying competitive pressures, further complicated by the financial distress of key competitors like Beta Bricks.

For the six months ended March 31, 2025, Willdale reported a deepened net loss at both operating and post-tax levels, driven by a severe revenue contraction.

Revenue plummeted 48% to $3,144 million from $6,074 million in the prior year.

This decline resulted from a 30% reduction in sales volumes, not due to waning demand but rather supply-side limitations stemming from inadequate working capital and obsolete production capacity.

Additionally, a 26% decline in average selling prices reflected aggressive price competition in the brick industry.

The operating loss improved to $1,789 million from $3,677 million in the prior year, suggesting incremental operational efficiencies despite market headwinds.

Basic and diluted earnings per share rose to ($0.0010) from ($0.0051), indicating a reduced per-share loss.

Total assets marginally declined 1% to $32,620 million from $32,819 million while total equity contracted 10% to $21,023 million from $23,399 million highlighting a deteriorating financial position.

The Zimbabwean brick industry faces increasing market concentration, with competition from players like Beta Bricks and informal, non-compliant operators. Beta Bricks’ financial turmoil has reshaped competitive dynamics.

On December 24, 2024, its board approved a corporate rescue application due to its inability to service an $8.7 million debt, including loans guaranteed by its parent company. This debt comprises obligations to clients for prepaid orders of bricks, roofing tiles, and aggregates, with FBC Holdings as the largest creditor, owed $10 million.

Beta Bricks, which delayed production slated for early 2025, has not resumed operations as of May 2025. The company plans to settle its debt by supplying bricks over 18 months, though this is contingent on restarting production.

FBC was promised a $4 million payment by May 2025, with the balance to be cleared over 4 years, but delays have sparked investor skepticism.

Beta Bricks also owes employees $1.2 million and 1.24 million Zimbabwe Gold (ZiG), alongside debts to ZESA, further straining liquidity.

Beta Bricks’ distress was supposed to create a temporary market gap for Willdale, as its production delays disrupt supply chains for clients awaiting prepaid orders.

However, non-compliant suppliers, leveraging the 15% VAT reintroduced in January 2024, undercut prices, distorting competition and eroding Willdale’s margins.

Zimbabwe’s construction sector demand, driven by a 1.4 million unit housing backlog and government infrastructure projects, remains robust, but Willdale’s capacity constraints have prevented it from fully capitalising on this opportunity.

 Willdale anticipates a recovery in the second half of 2025, projecting increased sales volumes and profitability. This optimism is driven by Zimbabwe’s construction sector growth, fuelled by private housing, diaspora-funded projects, and public infrastructure.

However, the feasibility of this turnaround is questionable given Willdale’s current 30% volume shortfall, reflecting its inability to meet demand. Beta Bricks’ production delays offer a temporary opportunity to capture unmet demand.

The turnaround’s viability depends on the timely operationalisation of the all-weather plant to scale production capacity.

However, Beta Bricks’ debt settlement strategy supplying bricks over 18 months could flood the market with low-cost inventory if production resumes, potentially undermining Willdale’s pricing power.

To overcome competitive pressures and capitalise on Beta Bricks’ setbacks, Willdale can adopt strategies from regional and global brick manufacturers like South Africa’s Corobrik and India’s Wienerberger-backed ventures.

Emulating Corobrik’s automated production systems, Willdale can integrate energy-efficient kilns and robotic molding in its new plant to minimise unit costs and enhance scalability, while adopting Wienerberger’s eco-friendly brick offerings, Willdale could produce low-emission or recycled-material bricks to attract environmentally conscious buyers and align with regulatory trends.

To counter non-compliant rivals, Willdale should implement tiered pricing, offering premium products (e.g., Topaz bricks) for high-margin segments and cost-competitive common bricks for price-sensitive markets, leveraging Beta Bricks’ supply disruptions.

Following South African models, Willdale should invest in alternative energy sources like solar to mitigate ZESA-related outages and secure raw material contracts for production continuity..

To enhance feasibility, Willdale must expedite asset monetisation, secure favourable financing, and prioritise plant commissioning. Operational efficiencies, such as minimising foreign exchange exposure through ZiG-denominated transactions and optimising cost structures, are critical.

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