Zimplow CEO upbeat as Caterpillar exits

Business Digest
Zimplow held the Caterpillar local dealership through Barzem Enterprises, which is now combing through the markets to find a new supplier.

MELODY CHIKONO ZIMPLOW Holdings chief executive officer Vimbayi Nyakudya said this week a decision by Caterpillar, the world’s largest earthmoving equipment maker, to exit a 70-year-old dealership arrangement would be a setback, but the firm was ready to handle the change.

Zimplow held the Caterpillar local dealership through Barzem Enterprises, which is now combing through the markets to find a new supplier.

Appetite for earthmoving technologies has been robust in Zimbabwe, where the government is currently undertaking extensive infrastructure revamps following years of neglect.

“Its absence, effective 30 September 2022, will be a notable setback in the short term,” Nyakudya said, speaking exclusively to businessdigest.

“However, we are confident of engaging an equally competitive original equipment manufacturer (OEM) in the mining and infrastructure equipment space. We look forward to finalising the on-boarding of a new (supplier) in the shortest possible time, in order to deliver a reliable, durable and cost-effective mining equipment solution to the Zimbabwean market post 30 September 2022,” the Zimplow CEO said.

Along with opportunities in the public space, demand has also been huge in the mining industry, where big players have been expanding operations, while a string of new operators have trooped in.

Caterpillar has been shifting strategy globally, including exiting from the coal and soft rock underground mining business to focus on other mining technology.

Barzem was established over 70 years ago as the local Caterpillar dealer and has gone through a number of name changes over the past decades with the most recent ones being Barlows Tractor International and Zemco.

In financial statements for the year ended December 31, 2021 released last week, Zimplow said; “Barzem will exit the Caterpillar distributorship on 30 September 2022 given the changes in the strategic direction by both the supplier and Zimplow Group. One of the key strategic matters the group is currently seized with is the search for a new OEM (original equipment manufacturer) of earthmoving equipment to replace the Caterpillar brand at the end of the Distributorship Agreement on 30 September 2022”.

Zimplow said Barzem’s volume sales of earthmoving equipment rose by 84% during the year ended December 31, 2021 tracking steeper demand in publicly funded road construction projects.

“On the other hand, the focus on production by major mining houses who use CAT surface mining and handling equipment resulted in increased fleet maintenance. Consequently, parts sales grew by 75% and hours sold by 65% against prior year performance,” Zimplow said.

Farmec, another unit of Zimplow sold 48% more tractors than in the previous year, but a poor rainfall season hit sales of other farm implements under the Mealie Brand unit.

Powermec, the alternative power division, had a mixed year. Because power supply was better than in the previous year, it sold 16% less diesel generators.

However, it has gone into solar, and that unit grew sales by 167%.

“The trading environment has continued to pose both opportunities and threats,” Zimplow said.