Zimplow closer to Barzem takeover
Diversified agro-concern, Zimplow Holdings, says it is close to securing the 49 percent shares in Barzem currently belonging to Barloworld Equipment UK as the group seeks 100 percent control of the equipment supplier.
Barloworld earlier in the year announced that it would be independently distributing Caterpillar products in Zimbabwe after Barzem Enterprises said its 70-year-old alliance with the technology dealer would lapse by the end of October.
Barzem is involved in the earthmoving and heavy equipment industries and the group believes acquiring the entire control of Barzem will expand the group’s footprint in the construction, mining and infrastructure industries.
“Zimplow is at the tail end of acquiring the shares in Barzem currently belonging to Barloworld Equipment UK with respect to Barzem,” said group secretary Sharon Manangazira in a trading update for the period to September 30, 2023.
She said the group is utilising capacity created through Tractive Power Solutions to service the earthmoving and heavy equipment customer segments.
Manangazira also added that the group is set to finalise the Original Equipment Manufacturer (OEM) acquisition and announcements will be made once the Barzem transaction is finalised.
According to the update, the Tractive Power Solutions (TPS) business unit continues to concentrate on broadening its client database and ensuring the continuous engagement of its existing clients.
Manangazira said the company is making progress in establishing itself in key locations such as Bulawayo, Mutare, Hwange and Chiredzi.
“Maintenance of the right stock holding levels remains a key priority in order to ensure seamless service delivery to clients.
“Performance for the business unit has been growing, as evidenced by a growth of 53 percent from the first quarter to the second quarter of the year.
“In the third quarter, the company registered a growth in performance of 82 percent compared to the second quarter of 2023 and this was driven mainly by service level agreements with key fleet owners,” she said.
Zimplow specialises in the manufacturing and distribution of agricultural equipment, mining supplies, and diverse engineering solutions.
It then boasts a comprehensive range of products in its portfolio, encompassing agricultural implements, irrigation equipment, generators, pumps and mining machinery.
For the period under review, the group’s revenue declined 7 percent to US$23,6 million from the comparative period last year, mainly attributable to the challenging operating environment it is currently obtaining.
In the group’s agriculture equipment and service, Mealie Brand, sales volumes for local implements at 14 220 were level against the prior year’s same period, while sales volumes for the export market at 10 276 rose to 13 percent in comparison to the same period in 2022.
The unit aims to consolidate its positive performance on the local market through continued customer visits and further strengthening of relationships with wholesalers and non-governmental organisations.
“During this year’s Zimbabwe Agricultural Show, the business unit launched the two-wheel tractor and related implements.
“This move has had a significant impact on business volumes, as evidenced by increased sales with respect to trailers,” said the group secretary.
She added that the business unit is progressing well with its capacitation project as the majority of the equipment was procured in the period under review and delivery is expected towards the end of this year.
“The refinement of products to achieve a competitive edge is currently underway in order to boost business volumes as it relates to the export market,” said Manangazira.
At Farmec Implements, sales stood at 156 units, which is a decrease of 11 percent in comparison to the same period last year.
Tractor units sold were 85, which is a decline amounting to 11 percent when compared to September 2022.
“Farmec is intensifying efforts to secure funding in conjunction with local financial institutions for the benefit of its existing and prospective customers. Farmec is therefore focused on matching the demand pipeline given the change in market dynamics,” said Manangazira.
Valmec, the newly established business unit, is creating its unique footprint on the local market and expanding its market share.
During the period under review, three tractor units and ninety implements were sold at the unit, which was launched on September 29, 2023.
In the logistics division, Scanlink recorded an impressive performance, and in this respect, 12 trucks and 19 buses were sold by the business unit.
“Thus, truck and bus sales were 33 percent and 850 percent ahead of prior year performance and budget, respectively.”
Service hours totalling 9,298 resulted in the business unit recording a positive variance of 14 percent in comparison to prior-year performance.
“The parts business is expected to improve on the back of a new consignment of fast-moving stock that was received during the month of September 2023,” reads part of the update.
The Trentyre business unit recorded 6,751 units of retreads for commercial and consumer tires, resulting in a negative variance of 12 percent in comparison to the prior year’s same period.
New tyre sales volumes of 11 786 were 5 percent below prior-year performance, and management is modelling the business to the operating conditions in a bid to reclaim market share.
During the quarter under review, CT Bolts was level in terms of tonnage volumes overall, having sold 219 tonnes.
“The mining and construction sectors were the notable revenue contributors for the business unit in the period under review, and the company will continue to implement various business development and growth initiatives targeted at the mining sector,” said Manangazira.
The company recorded a 2 percent
positive variance in the sale of mild steel bolts in comparison to the same period last year.-businessweek
