Lafarge plant incident to impact fourth quarter 2021 performance
LAFARGE Zimbabwe says an on-site incident involving roof collapse of one of its cement mills, will have an impact on the group’s business performance in the remaining quarter of 2021.
The incident that happened on 11 October 2021, recorded no fatalities or injuries, but there has been a general low visibility of the company’s cement on the market.
“The necessary measures to restore the structures and restart the mills have commenced and are well under way,” Faithful Sithole, the company’s secretary said in a statement.
She added that stakeholders will be informed of any further developments in due course.
Lafarge in March this year commenced its last project, the new Vertical Cement Mill under the US$25 million expansion plan that commenced in 2019.
Under the expansion plan, the company installed the new US$2,2 million automated Dry Mortars (DMO) plant, which saw production capacity increasing from 7000 tonnes per annum to 100000 tonnes per annum.
The installation work for the new Vertical Cement Mill, commenced in March 2021 and is expected to be commissioned in March 2022.
Under the US$25 million expansion plan, Lafarge is aiming to more than double market share and annual production capacity.
According to the company’s trading update to May 2021, 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 the government.
Cement volumes for the period increased by 23,7 percent compared to prior year in spite of the Covid-19 national lockdown instituted in the first quarter.
“In the same period Dry Mortar products volumes grew by 105 percent compared to the same period last year.
“The Binastore retail franchise recorded a remarkable 555 percent growth in volumes compared to the same period in prior year. This 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,” said the company.
The company noted that as a result of strategic changes in product portfolio mix the average selling price was favourable against budget.
For the year ended 31 December 2020, the group posted a much-improved financial performance for the year in spite of the Covid-19 induced operational challenges.
Revenue for the year grew by 68,5 percent to $6,9 billion compared to $4,1 billion in prior year, attributed to significant volume growth in the Dry Mortars business and a market shift towards high strength cement which influenced a significant change in the cement product mix.