BY BUSINESS REPORTER
ZIMBABWE Stock Exchange-listed cement maker Lafarge Cement yesterday said it had completed crucial test runs on a multi-million-dollar dry mortars plant, as work towards assembling another key plant began.
A statement released to NewsDay Business said Lafarge’s latest forays would be at the heart of an ambitious expansion strategy that is seen transforming Zimbabwe’s second biggest cement maker into a multi-product operation.
The firm had mostly relied on cement production at its decades-old operation in Harare.
“The business launched a US$2,2 million investment for its dry mortars business in March 2020 with a test run concluded last week on the new plant, which is set to transform its value-added allied products production from 7 000 tonnes per annum to 50 000 tonnes per annum,” Lafarge said.
Lafarge’s dry mortars division houses a range of products, including the SupaGrow agricultural lime range, which was launched in 2020 in line with the diversification strategy.
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The statement said Lafarge had also entered the tile adhesives range and several allied products to complement the cement operation, which faces stiff competition from imports and stronger domestic peers.
Survival of Zimbabwe’s cement makers has been threatened by an overflow of regional imports, which are precipitating a blazing price war, according to a paper prepared by the Zimbabwe Concrete and Cement Institute (ZCCI) last year, titled An Attractive Market for Excess Regional Capacity.
The paper exposes how South African, Mozambican and Zambian cement players have capitalised on low overheads in their home markets to ship excess output into Harare.
Their products land on the fast-shrinking Zimbabwean market at far cheaper prices than those obtaining here, but are viable enough to give them a profit.
The ZCCI warned that if left to spiral unchecked, a regional price war could throw all the country’s five producers into bankruptcy within a year, and proposed extensive State intervention to limit foreigners’ forays into the domestic market.
Yesterday, Lafarge said its dry mortars factory upgrade positioned the business among the largest manufacturers of tile adhesives in the country.
“As the country pursues import substitution and growing the local economy, Lafarge remains committed to pursuing an aggressive growth strategy around growing the core cement business while innovating around new higher margin product lines,” the statement said.
“Before the close of 2020, Lafarge signed a supply contract for a vertical cement mill, an investment which will see the company double its cement milling capacity and improve its latitude to widen its cement product offering. Civil works for the installation of this equipment begin this month,” said Lafarge.
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