Lafarge Zimbabwe sees cement demand drop 19%

Lafarge Zimbabwe has seen a 19 per cent decline in cement consumption. Flora Chinhaire, Lafarge Zimbabwe Company Secrtary reported that hyper-inflation in the country had impacted demand. The Zimbabwe National Statistics Agency's inflation rates for September 2019 saw a 350 per cent rise YoY.

“The operating environment in the second half of the year continues to be challenging for the business as the effects of hyperinflation become more evident due to cost inflation caused by devaluation," said Chinhaire

“Demand from individual home builders decreased, necessitated by mortgage financing cost increase driven by an escalation in average lending rates to over 30 per cent. This affected the execution of a number of construction projects as well as delays in investment into new projects."

Ms Flora Chinhaire, said the firm was optimistic of opportunities in the growth of the construction sector beyond 2020. "In this vein, management has successfully concluded financing arrangement for a US$15m facility to fund expansion cement milling capacity and the Dry Mortar Mix (DMX) plant.

"In addition, in order to mitigate the effect of erratic power supply, the business has embarked on alternative power supply to supplement Zesa generation as part of our expansion efforts," she said.

Work on the cement mill expansion project is scheduled to commence in January 2020.