Zimplow sees growth from Govt programmes
Agriculture and mining implements supplier, Zimplow Holdings Limited is upbeat about the Government’s thrust on infrastructure development, increased agriculture and mining output will buoy demand for the group’s products and services, driving earnings.
Government is angling for an upper middle income economy by 2030.
This growth will be driven mainly by agriculture and mining sectors, which are the anchors for the Zimbabwean economy.
In mining, the Government has already set a target of US$12 billion annual revenue for the sector in 2023.
For Zimplow, the onset of the rainy season will also drive demand for its products in the agriculture segment, and help lift full year earnings.
“The impending rainy season will drive demand for products and services under the group’s agriculture cluster,” said company secretary Mrs Sharon Manangazira in a trading update for the quarter to September 30, 2022.
“Furthermore the continued national strategic thrust on infrastructural development, coupled with the continued drive in output growth in mining sector by central Government, bodes well with the group’s logistics and automotive cluster and mining and infrastructure cluster.
“Management shall leverage on increased activity within the fourth quarter of 2022, within the economic sectors that the group operates in that is agriculture, mining and logistics in order to achieve improved profitability levels,” she said.
During the third quarter, the group recorded an 11 percent increase in revenue compared to the same period in the prior year albeit a challenging environment.
Under the agricultural equipment and services, Farmec recorded tractors and implements volumes went down 4 percent and 9 percent respectively but the group is upbeat of the unit’s performance as the farming season commences.
Mealie Brand achieved a 26 percent growth in the provision of export implements to its clientele in the region, compared to the same period last year.
“The company has earmarked the introduction of a number of new products for the fourth quarter of 2022 in order to boost its revenues,” said Mrs Manangazira.
As for the mining and infrastructure equipment and services business, Barzem largely operated under care and maintenance and ceased to be a CAT distributor by the end of the quarter under review.
CT bolts registered a 1 percent decrease in volumes compared to the same period in the prior year, but the company continues to enter new markets in the various economic sectors.
At Powermec, erratic power supplies drove demand for alternative power sources such as solar powers and generators.
Resultantly, part sales and services increased 24 percent and 70 percent respectively compared to the same period last year.
In light of this, Mrs Managazira said the group expects to see growth in volumes and revenue in this segment.
She said: “The company continues to actively pursue increased business volumes for its solar power products given the persistent power outages currently taking place country wide.
“The group expects to record notable revenue in this regard for the remainder of this financial year.”
During the period under review, the logistics and automotive products and services business recorded solid performance with Scanlink recording parts sales volume growth of 7 percent and service hours by 9 percent.
At Trentyre, volumes in retreads for commercial and consumer tyres recorded a 60 percent increase compared to the same period last year.
Zimplow installed a second chamber during the quarter under review for purposes of retreads and management is upbeat this development will increase production.