CAT in shock move after Zimplow break-up

BARLOWORLD Equipment UK Limited (Barloworld) announced yesterday that it would be independently distributing Caterpillar products in Zimbabwe, a week after Barzem Enterprises said its 70-year-old dalliance with the technology dealer would be ending this October.

Barzem’s parent, the Zimbabwe Stock Exchange-listed Zimplow Holdings Limited, announced the end of the deal last week in financial statements for the year ended December 31, 2021.

Barloworld chief executive officer (CEO) Emmy Leeka yesterday said the company had taken the decision to manage CAT’s distributorship effective October 1, 2022.

“This is a result of our growth strategy, which has resulted in changes to our strategic direction and plans for business expansion in the area,” he said.

“The termination of the dealership agreement does not compromise our ability to deliver Caterpillar world-class solutions to our local customers. We want to assure our customers that they can continue to rely on our extensive experience in the mining and construction industry. Caterpillar equipment and services will still be made available in Zimbabwe with Barloworld as sole Caterpillar distributor of the brand. We will continue to be the country’s strategic partner in the growth and development initiatives of its key economic sectors.”

Barloworld Equipment is an earthmoving and energy supply organisation that has been operating for close to a century.

Last week, ZimpIow CEO Vimbayi Nyakudya told our sister paper The Zimbabwe Independent that while Caterpillar’s decision would be a “setback”, the firm was ready to handle change.

“Its absence, effective 30 September 2022, will be a notable setback in the short-term,” Nyakudya said.

“However, we are confident of engaging an equally competitive original equipment manufacturer (OEM) in the mining and infrastructure equipment space. We look forward to finalising the on-boarding of a new (supplier) in the shortest possible time, in order to deliver a reliable, durable and cost effective mining equipment solution to the Zimbabwean market post 30 September 2022,” the Zimplow CEO said.

Along with opportunities on the public space, demand has also been huge in the mining industry, where big players have been expanding operations, while a string of new operators have trooped in.

Caterpillar has been shifting strategy globally, including exiting from the coal and soft rock underground mining business to focus on other mining technology.

In a statement to its financial statements, Zimplow said: “Barzem will exit the Caterpillar distributorship on September 30 2022 given the changes in the strategic direction by both the supplier and Zimplow Group. One of the key strategic matters the group is currently seized with is the search for a new OEM of earthmoving equipment to replace the Caterpillar brand at the end of the Distributorship Agreement on 30 September 2022.”

Zimplow said Barzem’s volume sales of earthmoving equipment rose by 84% during the year ended December 31, 2021 tracking steeper demand in publicly fund road construction projects.

“The focus on production by major mining houses who use CAT surface mining and handling equipment resulted in increased fleet maintenance. Consequently, parts sales grew by 75% and hours sold by 65% against prior year performance,” Zimplow said.-newsday