HomeBusiness DigestCircle to shut down for upgrade

Circle to shut down for upgrade

Staff Writer

CIRCLE Cement Ltd is shutting down its plant in June for a major refurbishment programme, chairman Ian Coulter said last week.

sans-serif”>He said the plant would be shut down for about 50 days during which all orders would still be delivered.

“Due to the major plant refurbishment scheduled for June/July 2004, the plant will shut down for 50 days to facilitate this major project,” the chairman said. “Plans have been implemented to ensure that the company continues to meet demand for cement during this period.”

In its historical results for the 12 months ended December 31 Circle managed to beat market expectation by moving from a loss of $862 million to a profit of $9,8 billion attributable to shareholders.

Cement contributed $8,1 billion and non-cement items $1,7 billion during this period.

In 2002 cement incurred a loss of $1,212 million while non-cement items contributed a profit of $350 million.

The group’s historical turnover increased by 1 145% to $42,9 billion as a result of the high inflation.

Losses were recorded during the period in which cement prices were controlled.

Basic earnings per share also increased from a $10,78 loss in 2002 to $122,32 per share for the current period.

“The company is still going through its recovery phase, following the debilitating effects of price controls,” Coulter said in his report. “In addition, there are pressures on the cash flows due to the major plant refurbishment and offshore loan commitments.”

He said the year opened on a “challenging note” with price controls threatening the viability of the cement industry.

“The situation was worsened by the high inflation rates, shortages of fuel and bank notes. Price monitoring replaced price controls in April. The shortage of foreign currency exacerbated the problems faced by the industry given that most essential spares, technical skills and equipment are imported,” he said.

The chairman said the company experienced shortages of coal and as a result had to suspend clinker production for six weeks in the first quarter.

The move necessitated the importation of coal, which helped sustain production.

Coulter said the introduction of the current monetary policy by the Reserve Bank of Zimbabwe had brought optimism, however, the construction industry remains largely subdued.

“We are encouraged by the talks of an infrastructure bank and the government housing development plans as these are likely to result in increased activities for the company and indeed the entire construction industry,” Coulter said.

Lafarge, the ultimate holding company, continued helping Circle in all areas, including assistance with the repair and refurbishment to the plant and the provision of a guarantee, enabling the company to access foreign loan funding for the plant rehabilitation.

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