Construction sector players anticipate massive growth
As Zimbabwe witnesses increased economic activities following relaxation of Covid 19 restrictions, listed construction and related firms are pinning hopes on several projects lined up by both the Government, private sector and individuals.
The economy is projected to grow by 5,5 percent supported mainly by increased agricultural production and mining sector. This, market watchers have said, will increase disposable incomes and also drive the construction industry.
Already, various projects are on-going, carried over from the prior year where business was firm, driven by roads and earthworks, water, housing and mining infrastructure.
Experts in the sector say the works were evenly spread between the public and private sectors.
Government’s renewed interest in infrastructure development was the key driver of growth for the road and earthworks projects.
In addition, the contract periods improved from short term to medium-long term on the back of an improved operating environment.
In line with this, demand for construction material such as bricks, cement, roofing and plumbing materials has also been on the increase supporting businesses in the sector.
Turnall chairman, Bothwell Nyajeka, indicated plans were underway to invest in a new plant and resume production of roofing sheets in Harare to augment the Bulawayo plant in line with increasing demand for the company’s products.
Additionally, the group is also looking at commissioning a Glass Reinforced Plastic (GRP) pipe plant, which will bring diversity to its range of pipes.
Mr Nyajeka said this new large diameter pipe plant should also play a critical part in the Government’s plans to both create manufacturing jobs and improve water supplies to the country.
“Management is extremely optimistic that the business will continue to grow and maximise shareholder wealth,” he said in an update for the year to December 31, 2021.
At Masimba Holdings Limited, management is upbeat of a solid performance this financial year and going forward supported by a strong order book valued US$214 million by close of 2021.
The book is evenly balanced between private and public sectors spread over housing, buildings, roads, mining and water infrastructure although foreign currency shortages may slowdown progress.
“The infrastructure development prospects remain bright as evidenced by a long project pipeline and increased tendering activities.
“However, the execution thereof may be detracted by the continued foreign currency shortages and pricing distortions. We therefore urge the relevant authorities to pursue macroeconomic stabilisation policies, for the contracting sector, in particular, to contribute to the attainment of the objectives of the National Development Strategy,”said chairman Gregory Sebborn.
For brick making firm, Willdale, the several housing developments by both individuals and institutional developers are a plus for the firm which is anticipating strong demand this year. Although Covid-19 disrupted the smooth flow of business in 2021, Willdale recorded a 32 percent volumes growth while production jumped 19 percent ahead of prior year.
The brick making firm is expecting to maintain this growth momentum driven by strong appetite for modern housing coupled with Government’s drive to reduce housing backlog under the NDS1.
Listed property firms like First Mutual Properties and Mashonaland Holdings Limited have also highlighted various projects being undertaken as they also seek to diversify and expand their portfolios, therefore increasing demand for building materials such as bricks and cement.
While Lafarge is upbeat of its prospects, the cement maker also expressed concerns the global economic trends due to the war in Ukraine could weigh down activity as a result of supply chain disruptions.
Generally, the company is “optimistic about the opportunities in the infrastructure sector as the Government continues with its strategy for infrastructure development.”-ebusinessweek
