Willdale Ltd will this year increase capacity utilisation to more than 60%, which will see it producing 9-12 million bricks per month in the dry season, a company official said.
Consulting CEO Clifford Mushambadzi told shareholders at an AGM that Willdale was on the verge of realising the fruits of the last 5 months’ effort under the new strategic plan.
Production capacity had risen to 20% and was expected to reach 30% next month as the drier season starts. This would be ramped up to above 60% by end of year.
Mushambadzi said the brick-making firm was currently implementing a raft of measures that would see it closing its bleak chapter.
“The future is bright for Willdale, so much work has been put in place and we are confident that we will return to profitability following a year run of loss making. The confidence we have is visible in the new board which has a clear vision for the future.
Once you have the right leadership, the rest follows into line,” he said.
“It is safe to say we would have reclaimed a significant portion of the market by year end. However, we will not be taking the market from anyone as demand currently outstrips supply. We can certainly double our market share with ease,” Mushambadzi added.
The firm was also planning to reduce costs by streamlining its headcount, but this would unlikely involve retrenchment.
He said Willdale had regained its market share, with demand exceeding supply, and customers who had moved on were starting to come back.
Willdale realised that a survey on demand for local clay brick was long overdue and getting a comprehensive survey done was in the mandate of their strategic plan, chairman Alex Jongwe said.
“Although some business has been lost to the cement brick trade due to lack of supply, the preference in this market is for clay bricks,” he said.
Jongwe said current production numbers were at between 1 million and 1,5 million bricks a month, adding the company was working to a dry season high of 12 million. He added the average production historically was between 3,5 million to 4 million a month while the plant capacity was over 12 million.
Under the strategic plan Willdale is also looking at plant rehabilitation and investing in mobile equipment which will lead to a labour reduction by 50% from 500 to 250.
Jongwe flagged an US$8 million capital raising exercise, saying some local financial institutions and banks had shown interest while they are also looking at moving to cheaper long term loans from external lenders. He said the company was hoping to make an announcement to this effect soon.
About US$2 million is required for the purchase of mobile equipment as they currently hire at rates that are double that of South African suppliers. All weather facilities require US$5 million while for general working capital Willdale requires US$1 million.