Zimbabwe: Lafarge Pins Volume Recovery Hopes On New Plant

30 May 2022

After experiencing a 55 percent cement volume decline in the first quarter, Lafarge Cement Zimbabwe Limited anticipates the Vertical Roller Mill (VRM) to double the company's cement capacity when it commissions the plant in the second quarter.

Production was mainly affected by the slow startup mode of cement mills which were restarted in February following the collapse of the cement mill house roof in October 2021.

"The company is in the process of commissioning the new VRM whose expected start-up in Q2 will double the company's cement production capacity and improve the availability of raw material to the new DMO plant. The launch of the VRM will reposition the company on a growth trajectory into the future which will have a positive impact on the company's revenue generation and profitability," said the company in its Q1 trading update.

The company is confident that volumes will recover and grow as the availability of cement stabilizes, especially after the new VRM start-up in Q2.

Despite the adverse impact of the cement mill house roof collapse on cement volumes, the company's historic revenue grew by 36 percent versus the same period last year.

However, the company's Dry Mortars volumes fell by 23 percent compared to the same period last year.

"This is attributed to the suppressed cement availability post the cement mill house roof collapse in October 2021 as cement is a key input in Dry Mortar products," said the group.

The company continues to face challenges in securing foreign currency for the timely replacement of critical spares that are sourced off-shore. Foreign currency allocations through the auction market were below the company's requirements and as a result, the company is struggling to meet foreign currency obligations.

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