Home builders spur Lafarge’s revenue increase
LEVERAGING on the growing market demand in the individual home builder segment and government-led projects, the country’s leading cement manufacturer, Lafarge Cement Zimbabwe registered a 23% cement volume increase, compared to the prior year, according to the firm’s Year-to-Date May 2021, Trading Update.
Lafarge’s business units namely, the Dry Mortar products, coupled with the strategic changes in the product portfolio mix meant the cement manufacturer posted revenue increase in the period under review.
“In the same period, Dry Mortar products volumes grew by 105% compared to the same period last year. The Binastore retail franchise recorded a remarkable 555% growth in volumes compared to the same period in the prior year.
“As a result of strategic changes in product portfolio mix the average selling price was favourable against budget. This, coupled with the significant growth in volumes, secured the company a 346% (inflation-adjusted: 31%) increase in revenue compared to the same period prior year.”
The growth registered in the retail franchise business was further strengthened by the growth in purchases made on the Binastore e-commerce site facilitating business continuity during lockdown periods.
On the back of effective cost reduction initiatives implemented in 2021 and revenue growth, the company’s EBITDA margins strengthened by 2% versus the same period in 2020
Future business prospects still look bright for the cement manufacturer has recently launched the new US$ 2.2 million automated Dry Mortars (DMO) plant, which was completed and commissioned in the period under review.
The new plant will see the Dry Mortars production capacity increased from 7000 tones per annum to 100 000t per annum.
Another project, which is in the pipeline, is the installation for the new Vertical Cement Mill, which commenced in March 2021 and is expected to be commissioned in March 2022.
This project is the last of the three-recapitalization projects, lined up in the firm’s business expansion plan announced in 2019.
In the period under review, the company launched the country’s first waterproof cement under the label Water Shield, as part of its progressive product innovation and expansion drive.