Harare - Construction activity may have slowed down in Zimbabwe but cement maker Lafarge is raking in the profits and hoping to benefit from infrastructure development projects with Sanlam following incessant rains that have pounded the country this year.
Lafarge has been buoyed by increased profitability in Zimbabwe despite pressures in South Africa. Chairman Kumbirai Katsande this week said it would leverage its competitive positioning in the “regional market segment through a competitive strategy” that rides on a key partner network and stepped up market level penetration.
Katsande said the company raised pre-tax profits by a massive 277 percent to $4.22 million (R56.8 million) but accumulated foreign currency payments backlogs.
The Zimbabwean market has become increasingly competitive with the construction of a new Harare plant by PPC which has just been commissioned.
“Despite a stagnant market and pressure of imported cement products following the severe devaluation of regional currencies, the company grew volume sales by two percent. Low liquidity levels and restrictions in foreign currency allocations impacted cement off take,” said Katsande.
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Sanlam’s involvement comes through a 40 percent stake in life insurer Zimnat which it bought for $11.5 million (R154.7 million) in 2015. Zimnat chief executive officer Mustafa Sachak said the company was poised for a windfall from underwriting infrastructure developments projects in the country.
This year provides Lafarge Zimbabwe and other cement manufacturers in Zimbabwe as well as construction firms with massive potential from infrastructure construction following heavy rains occasioned by Tropical Depression Dineo.