Lafarge reports strong performance in 5 months
Listed cement producer, Lafarge Zimbabwe, has reported a strong business performance in the first five months of the year across all segments owing to growing market demand.
Lafarge company secretary, Faithful Sithole, said 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 government’s ongoing infrastructure development projects.
She said cement, dry mortar products, Binastore retail franchise volumes went up significantly during the January to May period.
“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.”
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.
This resulted in strategic changes in product portfolio mix the average selling price was favourable against budget.
“This, coupled with the significant growth in volumes, secured the company a 346% increase in revenue compared to the same period in prior year on the back of effective cost reduction initiatives implemented in 2021,” Sithole said.
The company’s EBITDA margins strengthened by 2% compared to the same period in 2020.
She said focus remains fixed on ensuring profitability and the cost optimisation drive remained integral given the unstable operating environment.
Lafarge commissioned a new US$2.2m automated Dry Mortars plant in the period under review.
This resulted in the Dry Mortars production capacity increasing to 100,000t per annum from 7000 tonnes.
The company is also expecting to commission a new Vertical Cement Mill in March next year.
This project is the last of the three recapitalisation projects lined up in the business expansion plan announced in 2019.
Sithole said the company continues to innovate in products and services with an objective to offer continuous improvement in convenience and customer satisfaction through a rich product mix.
During the period under review, the company also 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 dry mortars plant line and is the first of a series of new products set to be delivered from the added capacity in the DMO business.
Beyond the period under review, the company has since launched yet another innovative offering; a high end dry mortars range of products under the name Tector which consists of plastering mortar (TectorPlast) and Tile Adhesives (TectorCeram) designed to give superior finish to construction works.
Sithole said innovation remains a key focus, leveraging on the increased manufacturing capacity recently installed in the Dry Mortars business.
The company continues to build its resilience with a focus on upholding employee and stakeholder health while ensuring business continuity beyond the pandemic, she said.
Sithole said the business remains focused on expenditure discipline across the board with a key focus on production, distribution and contracted labour costs.
The cost optimisation culture continues to be leveraged in the organisation as a key driver for growth into the future, she said.
Lafarge has maintained momentum on the digitisation of customer services and continues to invest in improving the capabilities of the various platforms for added convenience and efficiency.
This has led to the achievement of 98% adoption of the Lead Retail customer service application by customers bringing convenience and ease of transaction processing to our customers.
The rising momentum in the use of online transaction sites continues to secure revenue for the business in restricted operating environment and the company remains optimistic for stability in commodity prices as well as exchange rates, Sithole said.