Zimplow set to finalise acquisition of Barzem
ZIMPLOW Holdings Limited, the country’s largest farming equipment manufacturer and distributor, says it is on course to conclude the acquisition of 49 percent shareholding in Barzem from Barloworld Equipment UK.
Until the recent termination of the contract, Barzem was the official distributor of the heavy earth-moving equipment brand, caterpillar, in Zimbabwe.
This is expected to boost the performance of the group’s new business Tractive Power Solutions (TPS), which was established to cater for the provision of earthmoving and heavy equipment solutions to its customers.
According to Zimplow, TPS, which was launched during the course of the 2022 financial year, has been well received by the traditional clientele that the group has served through Barzem in the past. The move is meant to consolidate the group’s operations and performance after Barzem, a joint operation with Barloworld, halted its Caterpillar dealership in September 2022.
This position had a negative impact on the group’s overall performance for the year to December 2022.
According to Zimplow, the group is determined to safeguard shareholder value by acquiring Barloworld’s 49 percent shareholding in Barzem at a discount in line with the remedies provided” in Barzem’s shareholder agreement.
Zimplow Godfrey Manhambara said in the group’s financials to June 2023 the group was resetting to assert its status as the supplier of choice for agriculture, mining, infrastructure, and automotive equipment solutions.
“The group is on course to conclude the acquisition of 49 percent shareholding in Barzem from Barloworld Equipment UK.
“It is also on course to recover from the gap caused by the termination of the caterpillar distribution agreement at the end of September 2022 through the launch of two new business units namely Tractive Power Solutions and Valmec as well as the implementation of the Mealie Brand capacitation project,” said Mr Manhambara.
This comes as Zimplow on Friday, officially launched Valmec, a new farm equipment division as part of its portfolio diversification strategy. Valmec is a one-stop shop housing merchandise brands like Valtra, Mosh, Sparex, and Farmer Ziraat.
According to Zimplow, the launch of the Valmec division is targeted at supporting entry-level or emerging commercial farmers who had not been covered by Zimplow in the past.
Farmer Ziraat will cater for the supply of cost-effective land preparation and tillage equipment from disc harrows, ploughs, and rippers while Mosh will cater for the supply of seeding equipment, fertiliser application and crop protection equipment.
Sparex will offer after-sales support or backup support, this aftermarket range focuses not only on the Valtra (Tractor brand) but also on well-known tractor brands like Case, Landini, Massey Ferguson, John Deere, and New Holland.
Zimplow group chief executive officer Mr Vimbayi Nyakudya said the launch of the Valmec division was meant to ensure that the clientele receives the necessary range of implements with a good pricing position, and the best customer experience.
“In terms of strategy, we want to be a one-stop shop, we want our customers to have the greatest convenience when they come to buy equipment. We are answering to the Government’s call of leaving no one and no place behind so we are becoming inclusive, thus establishing a one-stop shop. We are also following through the mandate of the Ministry of Agriculture to mechanise every farmer because the farmer is at the centre of what we do, so we are going to look at more ways to capacitate the farmer,” said Mr Nyakudya.
In terms of performance in the half-year period to June 2023, Zimplow recorded a 77 percent growth in revenue to $52 billion attributable mainly to notable growth in farming implements sales, while profit remained flat compared to the prior year.
Mealie brand implements sales contributed 88 percent to the total revenue in the period under review.
Implements sold in the local market were 69 percent ahead of the prior year whilst exports were depressed by 56 percent below the prior year mainly due to the slow uptake.