Zimplow to conclude 49pc Barzem stake acquisition

Zimplow Holdings Limited is set to conclude the acquisition of a 49 percent stake in Barzem from Barloworld, a development expected to restore and reaffirm the group’s dominant position in the agriculture and earthmoving equipment business by year-end.

This comes after Barzem, a joint operation with Barloworld, discontinued its Caterpillar (CAT) dealership in September last year, which had negative impacts on the group’s overall performance for the year to December 31, 2022.

Now the group is buying out Barloworld from the business, which has already transitioned to Tractive Power Solutions (TPS).

Group company secretary Mrs Sharon Manangazira indicated the group is now about to close the acquisition, a development set to propel overall performance this current financial year.

“Zimplow is at an advanced stage in concluding the acquisition of the 49 percent in Barzem, in line with the provisions of the shareholders’agreement. ‘‘This development is set to propel the performance of the group’s new business Tractive Power Solutions (TPS), which was set up in order to provide earthmoving and heavy equipment solutions to its clientele,” she said in a trading update for the first quarter to March 31, 2023.

TPS, which was launched during the course of the past financial year, and in an already congested market

has so far been well received by customers who the group has served through Barzem.
“Although the group is yet to secure exclusive distribution via an internationally acclaimed OEM, the expertise and technical competence in running

an earth moving dealership has provided TPS and Zimplow the much-needed depth in providing a one-stop shop for earth moving equipment fleet owners.

“To date, the group has secured service level agreements, repair and maintenance contracts amongst various onsite solutions with major fleet operators in the country. “Whilst the transition from CAT distributorship has not been easy, the group expects to have well repositioned itself in the
earth moving equipment sector by year-end,” she said.

Meanwhile, for the first quarter period, due to the delays in receipts for most key customers in both agriculture and the logistics sectors, emanating
from the constrained liquidity environment, the group has been behind the prior year period by 8 percent.Sponsored video

The trading environment remained challenging for the productive sector-related businesses constrained by the liquidity gaps emanating in the
market.
Major off-takers of agricultural products suffered liquidity and cash flow gaps resulting in delays in the payments to farmers, which in turn affected
scheduled equipment replacement programs.

The Government, during the period under review, continued to undertake several measures with a view to curtailing the devaluation of the local
currency and curbing rising inflation levels, therefore the restricted lending space. But various infrastructure development projects have provided
the group an incentive to adequately position itself with major earth-moving fleet owners through TPS.
The group is also sitting on a strong order book to support the recovery of performance in the second and third quarters given the projected trading environment.

During the quarter under review, Mealie Brand sales volumes of local implements improved by 72 percent in comparison to the prior year’s same
period. Preparations for the tobacco season boosted local sales as distributors were preparing themselves for the tobacco season.
But sales volumes for the export market reduced by 48 percent in comparison to the same period in 2022.
“Management will continue to take measures to consolidate the volume of local sales and improve the revenue on exports. The capacitation
program continues to offer improved efficiency and product diversification opportunities the group is pursuing,” said Mrs Manangazira.
At Farmec, after sales service hours increased by 16 percent when compared to the same period in the year 2022 while implements sales grew by 20
percent against prior year for the period under review.
Given the delayed receipt of wheat proceeds, tractor volumes declined by 23 percent for the same period under review.
The new business Valmec is starting to receive new stock and establishing its own identity in the market.
As for the logistics and automotive products and service, Scanlink experienced delays in deliveries of key orders that were expected during the
quarter resulting in a 50 percent decline in trucks and bus sales.
At Trentyre, volumes in retreads for commercial and consumer tyres recorded a 23 percent increase in comparison to the same period as a third
chamber was installed in mid-March 2023 further propelling production.
Under the mining and infrastructure equipment and service, CT Bolts tonnage was ahead of budget, compared to the same period in the prior year
due to participation in the ongoing national infrastructure projects as well as inroads made into the mining sector.
Part Sales and service at Powermec increased by 27 percent and 9 percent respectively in comparison to the same period in the prior year. But
generator sales and solar installations slightly fell 4 percent.-herald