Lafarge to ramp up production

HARARE - Lafarge Cement Zimbabwe (Lafarge) says it plans to double output to one million tonnes per year within the next decade.

The cement maker currently has an installed capacity of 450 000 tonnes per annum.

“At some point we will have a brand new plant in place. Today in our industry we are one of the leading players and we expect this to continue,” said Lafarge cheif executive Jonathan Shoniwa on the sidelines of the launch of the group’s new communication campaign, “building better cities”, last week.

He said the move will “help us to meet the extraordinary challenge of the growing urbanisation of our planet.”

“By 2050, there will be two billion new city dwellers which means that 70 percent of the world’s population will live in towns and cities.”

This comes as Lafarge has in the past five years injected nearly $25 million in plant its upgrade.

Shoniwa, the newly elected Institute of Directors in Zimbabwe (IODZ) director of the year, was optimistic about the country’s construction sector adding the industry would play a key role in economic growth.

“From a capacity point of view, we see ourselves not only supplying cement but supplying building and construction solutions to Zimbabwe and the rest of the region,” he said.

“The first approach will be a housing micro-finance project targeting individual home builders.
 
“This will involve working with several micro-finance institutions to develop a suitable offer for the informal sector,” said Shoniwa, adding that this will also enable access to finance for low to middle income earners.

The second approach, he said, is mass affordable housing which involves technical research on cost saving and efficient building systems while at the same time engaging potential partners such as government, real estate developers among other stakeholders.

Lafarge projects full year earnings to reach $90 million on the back of sustained individual home builders’ demand.

In a trading update, Shoniwa said the market will continue to be predominantly driven by home building projects, although there was a number of construction projects in the pipeline expected to boost demand.

In the two months to February, he said cement demand increased by six percent compared to the same period last year.

This resulted in a seven percent increase in revenue to $11 million against $10,2 million posted in prior comparable period.

The local cement maker is a subsidiary of the France-based Lafarge Group which operates in over 64 countries, generating annuals sales of approximately €15, 8 billion.

The global cement group holds a 76 percent stake while 21 percent is owned by locals through the Zimbabwe Stock Exchange.

The remaining three percent is also foreign-owned.

Meanwhile, Lafarge Group’s plans to reduce its shareholding in the local unit to 49 percent in compliance with Zimbabwe’s empowerment laws have been approved by the Indigenisation ministry. - Kudzai Chawafambira

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