Zimplow positioned for strong growth
Zimplow’s, which manufactures and markets a range of implements for farming, construction and mining sectors says it is in a good spot to sustain growth going forward.
Nelson Gahadza-Senior Business Reporter
Diversified implements manufacturer, Zimplow Holdings, says the group’s transformation strategy has begun bearing the desired results, which has positioned the company for sustainable growth.
As part of the strategy, the group in 2021 completed the acquisition of Scanlink and Trentyre, together with the supporting back-up infrastructure which it described as a significant milestone towards bringing value both to shareholders and customers.
Zimplow manufactures and markets a diverse range of products for the construction, infrastructure and agricultural sectors in Zimbabwe. It also manufactures and distributes metal fasteners for the mining, construction and agricultural sectors, and has interests in property management and leasing.
Mr Godfrey Manhambara, the group’s chairman, said Zimplow had continued to transform, making positive steps to build for the future and at the same time delivering positive financial performance.
“The strategic actions taken by the board and management have begun to bring the desired results in terms of positioning the group for growth ensuring Zimplow becomes the largest capital equipment solutions provider within Zimbabwe and beyond our borders.”
Mr Manhambara said in the group’s 2021 annual report. that as a result of the various threats and opportunities currently obtaining in the market, the group is constantly evaluating options available for the Group to sustainably deliver tailor-made value to both internal and external stakeholders.
During the 2021 financial year, revenue grew by 55 percent to $6,6 billion from $4,2 billion in the prior year largely driven by growth from all the group’s business units with Farmec and Barzem posting record performances.
In addition, the operating profit for the year under review grew by 88 percent to $970 million compared to $517 million in 2020.
In terms of the trading environment during the year 2021, Mr Manhambara said that the year saw major supply chain distortions to the group’s recently acquired businesses, that is, Trentyre and Scanlink.
“The supply chain distortions were caused by Covid-19 induced movement restrictions, which in turn affected supply of freight services.
“In addition, the Group faced challenges in the timely remittance of payments to foreign suppliers.”
Mr Manhambara said that the year commenced on a positive trajectory, however, lower than expected rainfall patterns during the 2021 rainy season adversely affected the agriculture based value chain.
“This circumstance was further exacerbated by acute foreign currency challenges, heightened inflation risk, causing exponential increases in operating costs. The above stated challenges resulted in the group placing considerable focus on balance sheet preservation as well as constant engagement of internal and external stakeholders.”
He said that tactically, the group has continued to prioritise its engagements with suppliers and Original Equipment Manufacturers (OEMs) and the group continues to take positions on strengthening working capital elements in order to drive growth and market positioning.
Mr Manhambara said the group has made considerable progress in various facets of the business inter alia human capital development, face lifts of branches of group entities, improvements in general back up infrastructure and factory capacitation.
He said that strategically, the group was realigning itself, in order to take advantage of the group synergies and delivery of a wide range of services entrenching the Group’s ambition as a one-stop shop for its customers.
“To sustain this ambition, the Group has restructured its operating model. The new operating structure will give rise to a new operating model focusing on market segments and/or clusters that we operate in namely, the Agriculture, Mining and Infrastructure and Logistics and Automotive clusters,” said Mr Manhambara.
During the year under review, Farmec posted an impressive performance growing volumes across all its main product lines. As a result, volumes for tractors by 48 percent, tractor drawn implements by 56 percent, parts sales by 30 percent and service hours by 22 percent compared to prior year.
Mealie Brand recorded a growth in volumes in local implements sales of 10 percent against prior year performance.
“There was significant growth in sales of hoes of 138 percent compared to the previous year, mainly driven by improved capacity at the factory,” Mr Manhambara said.
Trentyre recovered from a challenging first half of 2021 closing the year positively after a staffing and supply chain reorganisation.
Mr Manhambara said that the volumes of Passenger Car Radial (PCR) tyres grew by 28 percent against the prior year and the growth was driven by improved distribution channels and stock availability.
Scanlink recorded a strong performance despite numerous headwinds attributable to Covid-19 induced supply chain disruptions which negatively impacted the operations of Scanlink.
Parts sales grew by 107 percent driven by strong demand after the realignment of our supply chain model, which made our business extremely competitive and convenient to our customers. Mr Manhambara said that Powermec was a relatively stable year from a power supply perspective on the main grid, hence the reduced demand for alternative power products.
Generator units sold remained subdued with a 16 percent drop from the prior year.
“However, the performance of Powermec’s new solar product range was encouraging as the business unit achieved a 167 percent growth against prior year,” he said.-herald.co.zw
