Lafarge Zimbabwe to reduce foreign shareholding

Lafarge Zimbabwe  to reduce foreign shareholding
18 March 2013

Lafarge and the Zimbabwe government have agreed on Lafarge reducing its shareholding in the Zimbabwean cement manufacturer to 49 per cent.

“We have agreed with the relevant authorities on the indigenisation modalities to bring down foreign shareholding to 49 per cent, in line with the indigenisation and economic empowerment [policy]. To this effect, our indigenisation plan was approved,” according to Muchadeyi Masunda, the chairman of Lafarge Cement Zimbabwe told local press.

Last year, the company's turnover rose by 41 per cent and domestic sales were up by 48 per cent. The group spent US$3.5m on a retrenchment exercise which ate into the company’s top line.

The group is now projecting a 29 per cent increase to US$90m for the year ended December 31 2013.

Managing Director Jonathan Shoniwa said targets was achievable given that demand for the first two months of the year had improved by 6 percent compared with the same period last year.

Group chairman Muchadeyi Masunda said finance costs went down 21 per cent to US$0.54m as the group contained borrowings. He said the group spent US$3.5m on a retrenchment exercise which ate into the company’s top line.

“Net cash generated by operating activities declined from US$5.6m in 2011 to US$4.7m  mainly due to an increase in inventory levels and taxes paid,” he said, adding that spare stock was increased to improve the company’s preparedness for emergency breakdowns.

“Cement and clinker stocks were also relatively high as demand tumbled during the month of December owing to heavy rains,” he said.

The housing backlog in Zimbabwe is extensive and mortgage financing is required to support residential projects going forward.

Shoniwa said the market remains predominantly driven by individual home builders while there was a number of construction projects in the pipeline which should boost demand should they materialize.

Published under Cement News