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Business Reporter
“Better efficiencies and cost management led to reduced cost of production. The plant is now poised to meet production in excess of 100 million bricks per annum.”

Listed brick manufacturer, Willdale Limited is poised to produce 100 million bricks per annum as better efficiencies introduced during the year helped in increasing production capacity to 70 percent.

Investment in refurbishing the plant and acquisition of equipment resulted in improved capacity utilisation from 60 percent of the previous year.

Willdale Limited chairman Mr Alex Jongwe in a statement accompanying the firm’s financial results for the year to 30 September 2015 said Willdale will continue to improve efficiencies and reduce the unit cost of production without compromising on standards required by customers.

“Better efficiencies and cost management led to reduced cost of production. The plant is now poised to meet production in excess of 100 million bricks per annum,” said Mr Jongwe.

Cost management initiatives undertaken during the year resulted in a 22 percent decline in average production cost compared to the prior year.

Green and burnt production volumes during the period grew 30 percent and 22 percent respectively compared to the prior year.

Meanwhile, Willdale’s revenue for the year was up 25 percent at $8,8 million compared to the prior year driven by a 40 percent increase in sales volumes.

An operating profit of $1,2 million was recorded against an operating loss of $0,6 million of 2014.

Net cash flows totalling $0,5 million were generated from operations despite the difficult operating environment. Capital expenditure for the year amounted to $0,327 million and was financed through cash flows from operations.

“The positive results are encouraging and reflect success of the turnaround strategy that the company is pursuing. Improved product supply capability helped restore confidence in the market leading to the company recapturing some of its lost market share.

“Competition was stiff for the few major construction projects available. Despite all the challenges, the company grew its revenue and profitability on the back of volume increases and better cost management,” said Mr Jongwe.

He said the product mix remained skewed in favour of low margin common bricks and this together with increased competition in that product range, led to an 11 percent decline in average prices. Mr Jongwe said several initiatives will be implemented in 2016 to improve competitiveness and regain more market share.

The company is determined to sustain the profitability but prevailing economic conditions continue to hinder the objective.

“We have confidence that various measures which Government is undertaking will soon unlock vast potential that exists in the construction industry. Production capacity is available to meet customer demands,” said Mr Jongwe.