Cement producer, Khayah Cement says high power costs coupled with cheaper cement imports flooding the market are threatening business viability.
The company, formerly, Lafarge Zimbabwe has been battling to recover higher electricity costs which have made its products expensive when compared with imported cement produced in the region.
"Power supply remained relatively constant throughout the year although power voltage fluctuations continued to affect the smooth operation of the manufacturing plant and equipmen t. The high-power costs compared to neighboring Zambia continue to pose a significant financial challenge," said company secretary Arnold Chikazhe.
The Zimbabwe Stock Exchange listed company is undergoing a period of recovery since the takeover by new majority shareholders Fossil Mines two years ago.
"We welcome and support efforts by Government and regulatory agencies to stabilise the macroeconomic environment and maintain the viability of the cement industry. The need to regulate cement imports, bring inflation under control, address electricity shortages and improve the state of the global economy are likely to dominate the company's performance for the year 2024," said Chikazhe.
Khayah Cement however still managed to grow sales volumes by 38 percent in the financial year ended 31 December 2023.
Net sales increased from ZW$117 billion in 2022 to ZW$240 billion in 2023 in line with improved production volumes across the business.
In the cement business, industrial performance increased with the installation of the Vertical Cement Mill in the third quarter of 2022.
"Cement sales volumes therefore closed at 34 percent above the same period in the prior year. Production performance was largely impacted by power quality challenges as well as equipment breakdowns, particularly at the kiln. One of the positive spin offs of the short-term rapid impact was to grow bulk cement contributions which increased from one percent in the prior period to four percent in 2023," Chikazhe said.
The plan to grow bulk cement contributions is in line with Khayah's strategy of penetrating the bulk cement market.
