eBusiness Weekly
Business Writer
Brick manufacturer, Willdale Limited, says firm demand for housing development, shopping mall and school infrastructure construction provides opportunities for the business throughout the year.
The company in a trading update for the quarter ended December 31, 2022 said exploiting the opportunities will, however, depend on stock availability not significantly impacted by electricity shortages.
“The recent investment in improving the crushing capacity will result in better product quality and improved competitiveness,” said Mavuto Munginga, the company’s secretary.
He said resources exist for working capital in the short term, however, borrowing rates are making it uneconomic to finance the business through borrowings.
“Short term business plans continue to be reviewed to navigate the fluid business environment. Several projects are planned for the foreseeable future and will provide the critical mass for the business,” said Munginga.
The company noted that ZIMRA has raised claims for output VAT on bricks on the basis that the company zero rated bricks without supporting legislation.
However, the company and other industry players have objected to ZIMRA’s interpretation of the law and the matter is pending.
Meanwhile, in terms of volume performance, sales for the three months were two percent below the same period in the prior year due to low product update caused by liquidity shortages while production levels in the quarter declined in line with available working capital.
Munginga said the scheduled maintenance program has progressed well and the plant is expected to meet targeted efficiencies during the coming peak production season.
“Demand for bricks remains high for various projects such as housing developments, schools and shopping malls,” he said.
Revenue for the quarter in hyperinflation terms was 36 percent above the prior year. Munginga said average prices remained firm, sustained by a favorable product mix, while management focused on cost management.
He said low stock availability resulting from the seasonal nature of the production cycle will affect profitability in the ensuing year.
In 2020, Willdale spent a total $35 million capital expenditure with the bulk of the funds on purchasing property, plant and equipment.
