AGRICULTURAL equipment maker, Zimplow Holdings Limited, has concluded the acquisition of a 49% stake in Barzem, with the firm now set-to be relaunched under a new name.
This comes after Barzem, a joint operation with Barloworld, discontinued its Caterpillar (CAT) dealership in September last year, which negatively impacted on Zimplow’s overall performance for the year to December 31, 2022.
Consequently, the group had to buy out Barloworld from the business, which has already transitioned to Tractive Power Solutions (TPS).
This move is set to drive the performance of the group’s new business, TPS, an entity set up to provide earthmoving and heavy equipment solutions to its clientele.
In a statement accompanying financial results for the year ended December 31,2023, Zimplow’s acting chief executive officer Willem Swan said the 49% stake in Barzem was acquired last month.
“The company successfully concluded the acquisition of a 49% shareholding in Barzem effective March 2024. Barzem is set to be relaunched under a new name and refreshed brand which will give more visibility and increase its foothold in the mining and infrastructure sector. Management plans to develop the acquired infrastructure in Msasa into a world class facility that will provide a one stop solution for the group’s customers and stakeholders,” Swan said
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Zimplow said TPS has created a footprint in the supply of filtration, lubricants and mining ground engaging tools as well as securing service level agreements with key operators.
Zimplow said management was encouraged by the growth in the order pipeline and demand management in which the business unit is expected to attain profitability in FY2024.
“TPS successfully signed a new distributorship agreement with Develon in later months of 2023, to replace the Caterpillar Distributorship previously housed in Barzem. Hyundai purchased Doosan creating HDI from which the Develon Brand was established. HDI is a global mining and construction original equipment manufacturer that was established since 1970. Develon is expected to be launched in Q3 of 2024. TPS further secured FAW distributorship to pivot the group’s strength in the mining and logistics sector. The FAW brand is an option that is more affordable for the business unit’s customers,” Swan said.
In the financial year ended December 31, the group’s revenue dropped by 28% to US$32 million from the prior year.
Barzem did not trade during the year under review due to the termination of the CAT distributorship agreement in September 2022.
“The late onset of summer rainfall in the 2023/4 cropping season dampened demand in the agricultural cluster and the impact of the economic headwinds resulted in a contraction in customer spending across the group. The resultant profit before tax was US$$0,68 million being 74% below prior year,” Swan said