Lafarge Cement Zimbabwe (Lafarge) is set to complete the installation of a US$2.2 million Dry Mortar Mix (DMX) plant during second half of this year as the cement-maker targets increasing its production capacity, 263Chat Business has established.
The project is part of Lafarge Holcim Group’s US$ 25 million recapitalization of its Zimbabwean subsidiary that was announced last year.
“Currently, the DMX plant is being installed and is set to be completed in the second half of 2020, while the Vertical Cement Mill supply contract was signed in August 2020,” said the Group’s chairman, Kumbirai Katsande.
Lafarge has been manufacturing DMX products for several years albeit on a small scale and the new plant once completed is expected to improve the company’s manufacturing capacity per year by over 700 percent from the current 7 000 tonnes to 50 000 tonnes.
The DMX product range includes tile adhesives, agricultural lime, tile gout, cement based paints and water proofing compound.
However, current volumes for the DMX business grew by 100 percent in the company’s half year performance to June 30, 2020 although the company expects a drop in the second half of the year due to the planned plant shutdown for renovations.
“Revenue for the six months grew by 27 percent to ZWL 1.1 billion (June 2019: ZWL 0.9 billion). Our cost rationalization, innovation and efficiency initiatives helped to improve gross profit margins by 8 percent to 50 percent (June 2019: 42%),” said Katsande.
The company started the year on a satisfactory note with first quarter volumes marginally exceeding the same prior comparable period by 1.4 percent before the onset of the COVID-19 lockdown which caused a significant drop in the monthly volumes of April 2020 by 71.4 percent compared to the same month in the prior year.
The volumes however recovered in May and June 2020, leading to total volumes for the period closing at 14.1 percent lower than the same period last year.
