Operating margins in last year’s first quarter were at 10%. Capacity utilisation at the kiln rose to 90% from 84% last year. Domestic demand had grown 28% from last year, mainly on the back of the retail market. The contribution of the construction sector remained at 18%. Shoniwa said export volumes were 26% below last year.
Chairman Muchadeyi Masunda believed the prospects for further growth in the domestic demand for cement remained strong. However, excess supplies would go to Malawi. Masunda added the group would continue to watch developments in Malawi, especially now that the country had devalued its kwacha.
The group had US$1 million offshore loans over three years at an interest rate of LIBOR + 2,5% per annum, payable quarterly. Local and offshore borrowings were at US$3,26 million, all guaranteed by the group’s treasury function, Financiere Lafarge in France. In 2010, the group had a short-term export finance scheme secured at an interest of 3,275% per year. The facility had been reduced to US$120 158 at the December year end, from US$223 500 in 2010.
Short-term loans were at an interest rate of 8% per annum. The group said it had provided security for its overdraft and loan facilities by way of first and second participation mortgage bonds over lots 1, 3 and 5 of Manressa, which at December 31 2011 were valued at US$1,94 million.
At the AGM, the group announced the appointment onto the board of Fola Esan, who is the chief executive of South and Eastern Africa operations for the Lafarge group.
Esan said the group remained committed to the Zimbabwe unit and that any issues that would arise would be handled within the SEA cluster.
He said the long term goal of the plant would be to invest in capacity. “We are looking at adding another plant in Bulawayo in the long term,” said Esan. The group said it would leverage on its current location to increase production. The aim was to have annual production of 1 million tonnes from the current installed capacity of 450 000 tonnes.