eBusiness Weekly
Michael Tome
HARARE – Cement manufacturer Lafarge Cement Zimbabwe Limited’s operating profit shrunk by 50, 8 percent to $914 454 for the year to June 30, 2018 from the $1, 9 million realised in the prior comparable period.
Group revenue however jumped to $32, 5 million, which was a 40, 6 percent rise from $23, 1 million recorded in the same period last year.
The increase in revenue was due to increase in demand for cement as the firm achieved solid sales growth of 41 percent as compared to the previous year, said the company.
In a statement accompanying the results, Lafarge interim company secretary Flora Chinhaire said increase in individual homes construction and mega projects like road constructions spearheaded by the Government have led to high cement demand hence improvement in sales for the company.
“Business environment has been characterised by growth in demand for construction supplies and this has seen more than 30 percent year to date (YTD) growth in cement demand versus prior year.
“This increase has been attributed to a rise in individual home building projects as well as the resumption of rehabilitation of roads across the country,” said Flora Chinhaire.
However the company bemoaned the continued rise in operating costs and limited access to foreign currency. Firms continue to grapple with the issue (forex) and Lafarge had to export clinker (nodular material produced in production of cement and is used as the binder in many cement products) in a bid to make foreign currency.
Chinhaire added:
“Operating costs continue to rise and limited access to foreign currency affects productivity as procurement of materials and spare parts suffers from prolonged delays.
“In an attempt to generate forex we exported 20 000 tons of clinker at lower margins which had a negative impact on profitability”.
Lafarge Cement Zimbabwe invested $1, 6 million in new plant and machinery upgrades a $900 000 rise from $700 000 which invested in the prior year.
This comes as its environmental impact assessment for limestone exploration drilling in Pfura Rural District was approved earlier this year.
The firm produces a range of products that include agricultural lime, lime-based paints, tile-coat and Impermo.
