High input costs hit Circle Cement

High input costs hit Circle Cement
Published: 30 March 2005

Increased input costs have caught up with one of Zimbabwe’s leading cement manufacturers, Circle Cement Limited (part of the Lafarge Group) whose operating margins declined from 29.5 per cent to 20.3 per cent in the year ending December 31 2004. The margins came down due to high increases in power and water tariffs, compounded by shortages of foreign currency and instability in the financial sector. Historical turnover was however up 264 per cent to US$156.2bn during the year under review. “The construction industry continues to be adversely affected by the absence of major construction projects, high finance costs and declining disposable incomes,” said Circle chairman Ian Coulter. Circle is pinning the industry’s revival hopes on the launch of the infrastructure bank, which has been on the drawing board for the past 12 months. Circle is also ‘looking at opportunities in the export market following the completion of the company’s major plant refurbishment.