BY MELODY CHIKONO
Zimplow recently appointed a new chairperson, Godfrey Manhambara who took over from Thomas Chataika. In FY2020 the Group recorded an encouraging performance and results despite the challenges posed by Covid-19 during the year. Revenues were 17% ahead of prior year driven by growth in volumes across the major product ranges at Farmec, Barzem, CT Bolts and Mealiebrand. Powermec suffered whole goods volumes reduction and exports sales were affected by Covid-19 induced lockdowns. The reduction in export sales and related exchange gains due to Covid-19 lockdowns and the exchange rate stability following the introduction of the foreign currency auction trading system respectively caused a decline in current year operating profitability by 41% compared to prior year. Now Manhambara who has been serving on the Zimplow board as a non-executive director says he will seek to double the groups’ current performance by 2024. Senior business Reporter Melody Chikono (MC) discussed Zimplows’ operations and performance under the new leadership. Below are the excerpts of the interview:
MC: You were recently appointed chairperson of Zimplow, may you share your vision?
GM: My vision is to double the group’s current performance by 2024 utilising the group’s diversified structure, premium brands, the technical expertise and experience of our people and the backroom infrastructure that we now possess.
MC: What key issues do you seek to improve on?
GM: The thrust is to be the right partner for our customers and stakeholders as a premier supplier of equipment for the agriculture, mining, construction, alternative power sectors and now extending into logistics.
We are therefore upskilling our staff, tooling up our factories and workshops and undertaking facelifts of our branches and facilities to ensure that our service delivery is the best in terms of class. We are working at improving our value delivery to ensure that overall, our unique capabilities that endear to our customers are clearly visible.
MC: In your FY2020 you indicated that you incurred operating costs above prior year to develop capacity for future growth. Kindly shed more light on this?
GM: As mentioned above, we are focusing on recruiting and retaining the right people and we therefore adjusted our remuneration model. Covid-19 has also had an impact on our operating costs as we had to acquire the necessary consumables to have the necessary preventive and social distancing measures in place.
Further, we have been tooling up and undertaking facelifts, repairs and maintenance of our backup and factory capacities.
On top of that, we have also had once-off transaction costs related to the acquisition of Scanlink and Trentyre.
MC: Talking about future growth, what are you looking at?
GM: The group’s vision is to be the supplier of choice, being a one-stop-shop for equipment, parts and services. We are looking at strengthening our positioning in the market, partnering with the right financial institutions, and adding more product lines to what we already have through our existing structure, of the seven business units we now have.
MC: Covid-19 has made companies to constantly review their business models in the face of uncertainty. What’s your comment in line with Zimplow operations?
GM: Covid-19 affected supply chains, reduced the number of physical meetings or interactions with customers and affected the operations of our customers.
With respect to supply chains, it meant that we had to increase the buffers/safety target of our stocks as lead times have generally been increased, and this meant our cash cycles have become longer. The way we project demand and our customer relationship management had to be tighter in order not to allow gaps in expectations while shortening the cash-flow cycle.
We had to start thinking much more intensely about technology. Our product support teams took it a notch up in terms of connecting machines and offering telemetry solutions for managing equipment and thus limiting the disruptions to availability. In a situation like this, it becomes critical for customers to work with organisations with depth and capacity such as the Zimplow Group.
We had to look at our IT systems, adopting some of the latest kit to adapt. Most meetings are now being conducted virtually, document sharing, and platforms are now part of our IT capacity.
MC: In the five months to May you have shown signs of resilience and posted improved results. What have been the major drivers?
GM: Having the right people, smart demand management and a proactive supply chain system in place.
MC: What initiatives are you putting in place to ensure you leverage on the improved agricultural yields?
GM: The agricultural sector is a key pillar of our economy. As a player in this sector, we are looking at the right partnerships with the Ministry of Agriculture, financial institutions, and farmer associations so that we provide the right products and solutions to empower the Zimbabwe agricultural community.
In addition, through our industrial engineering capability at the Mealie Brand division, we have developed a wide range of Pfumvudza compatible products. We are putting in place a package to respond to the local manufacture of both tractor-drawn and smallholder mechanisation products in line with the National Development Strategy 1 through the Ministry of Agriculture.
MC: You are looking at improved exports. What margins are you looking at?
GM: Export business is a tough space especially when competing with manufacturers from places such as India and China. We have however developed our niche markets in the surrounding countries leveraging on our quality products and superior after-sales service.
MC: You indicate in the trading update that there is a projected increased demand for Mealie Brand products. What’s driving the projection?
GM: A good rainfall season and the bumper harvest where Zimbabwe is expected to harvest 2,7 million tonnes of maize this year which is three times last year’s output and is the highest yield in 30 years. Most of the Mealie Brand customers are dry land farmers and therefore their incomes are directly related to the rainfall pattern and input availability.
MC: How do you see Zimplow in the next five years?
GM: Amongst the biggest listed groups in Zimbabwe and a key player in the southern/central region of the continent.