By Chiedza Kowo | NewsDay |
Cement manufacturer Lafarge Cement Zimbabwe registered a 23,7% increase in cement volumes spurred by growing demand by individual home builders, among other factors.
In its yearly update for the period ended May 2021, company secretary Faithful Sithole said there was a surge in demand for cement in spite of the adverse impact of the COVID-19 pandemic.
“In line with the 2021 strategic agenda, the business achieved volume growth leveraging on the growing market demand in the individual home builder segment as well as the ongoing major infrastructure development projects led by government.
“Cement volumes for the period increased by 23,7% compared to prior year in spite of the COVID-19 national lockdown instituted in the first quarter,” Sithole said.
“In the same period, dry mortar products volumes grew by 105% compared to the same period last year. The Binastore retail franchise recorded a remarkable 555% growth in volumes compared to the same period in prior year.”
Sithole said the growth in the retail franchise business was further strengthened by the growth in purchases made on the Binastore e-commerce site, facilitating business continuity during lockdown periods.
She pointed out that as a result of strategic changes in product portfolio mix the average selling price was favourable against budget.
This, coupled with the significant growth in volumes, Sithole said, secured the company a 346% inflation adjusted increase in revenue compared to the same period in the prior year.
On the back of effective cost reduction initiatives implemented in 2021 and revenue growth, the company’s EBITDA margins strengthened by 2% compared to the same period in 2020.
“Focus remains fixed on ensuring profitability, therefore, the cost optimisation drive remains integral given the less than stable operating environment,” Sithole said.
She revealed that the installation of the new US$ 2,2 million automated dry mortars (DMO) plant was completed and commissioned during the period.
“With this new plant the dry mortars production capacity increased from 7 000 tonnes per annum to 100 000t per annum.
“The installation work for the new vertical cement mill commenced in March 2021 and is expected to be commissioned in March 2022. This project is the last of the three recapitalisation projects lined up in the business expansion plan announced in 2019,” she said.
In the period under review, the company launched the country’s first waterproof cement under the label WaterShield as part of its progressive product innovation and expansion objective.
This product, made with hydro-defence technology, is manufactured from the new DMO line and is the first of a series of new products set to be introduced into the market.