Published by the government of Zimbabwe
Elita Chikwati
6 July 2009
Harare — ZIMBABWE'S third largest engineering firm, Zimplow Limited registered an excess of 25 percent export growth for the year ended December 31, 2008, from its Mealie Brand division export unit sales.
Export unit sales for the four months ended April 2009 were slightly ahead of those for the equivalent during the same period last year. The company expects export sales for the 12 months to June 2009 to be at least 20 percent ahead of the prior year.
Zimplow Ltd said the animal traction agricultural equipment business had improved export performance over the recent years resulting in the generation of foreign currency.
The foreign currency enabled the division and other business units to purchase materials from external sources during the period local suppliers were experiencing problems. This export growth has to some extent shielded the business from the decline that has occurred in the local market.
The four months to April 2009 however seen no improvement for the Mealie Brand in the local market. Volumes are not expected to improve until the economic situation improves. Other divisions performance reflected the economic activity in the country. CT Bolts, a distributor of steel fasteners experienced volume changes in its sales.
No meaningful trading took place with the division registering a decline in sales volumes by over 70 percent compared to the previous year. The major suppliers of CT Bolts were severely affected by foreign currency shortages in recent years.
However the four months ended April 2009 have seen a decline in volumes sales being arrested particularly after the introduction of the use of multi currencies. The division has thus been able to operate viably despite the severe contraction in sales.
CT Bolts is expected to improve as the economy improves with local and external suppliers carefully maintained to facilitate this. The company's other division, Tassburg that produces screws, verandah bolts and high tensile bolts and nuts which was acquired towards end of last year supplies the local market.
However the division has export potential, which the company expects to investigate, and pursue during 2009. The division is gearing up to resume full time manufacture as the economic situation improves.
The drop of steel prices internationally by as much as 50 percent put pressure on Mealie Brand to reduce local and regional prices. Operations have also been affected by the failure of the major local supplier inability to timeously supply key steel sections.
The Mealie Brand division however remains well stocked and was positive at the end of April 2009.
Zimplow is geared to take advantage of the anticipated upturn in economic activity in the country and regional initiatives in the agricultural sectors of a number of African countries to which Mealie Brand exports.
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