Conrad Mwanawashe Business Reporter
LISTED brick making concern, Willdale Limited, expects significant growth in volumes going into the last half of the year pushed up by new business from financial institutions and property developers placing orders for housing construction following the end of the rainy season. Chief executive officer Mr Nyasha Matonda said in an interview following the Willdale’s annual general meeting yesterday that the company is supplying five banks and property developers with “good” volumes of bricks and expects more new orders as the construction business picks up.
The institutions include FBC, Cabs, CBZ and ZPI which are involved in major housing construction businesses.
Willdale has a confirmed order for 200 000 bricks from one of the institutions and Mr Matonda said the trend in the past is that the institutions place orders of above 150 000 bricks per month.
“We are supplying the financial institutions and property developers apart from independent contractors and individuals. We expect more growth now that the rainy has come to an end,” said Mr Matonda.
The new volume growth should add to the expected above 60 percent increase in capacity utilisation from the current average of 40 percent.
“The early start to our peak production season and the improved level of preparedness for the season should see significant increases in volumes compared to prior years.
“We are therefore confident of a positive profit position for the financial year ending September 30 due to the high volumes and reduced unit costs,” he said in a trading update to shareholders.
In the first five months of the financial year which include three months of wet weather, there has been positive growth in production and sales levels compared to the prior year.
“Green and brunt production went up by seven percent and 25 percent respectively while sales volumes were up 49 percent. However, production volumes are below targets due to power outages furthermore during wet seasons production is very low,” said Mr Matonda.
This year’s dry season operations have started on a good footing and hitting the ground putting the company in a good position to achieve higher production levels.
The investment of $3 million into the operations last year has positioned the company to operate more efficiently and at significantly lower costs than in prior years.
“We bought new mobile equipment which is more efficient, resulting in reducing hiring costs.
“The plant itself was successfully refurbished and properly tooled and we had adequate working capital resulting in improved throughput,” said Mr Matonda.
The company is focusing on reviewing all cost drivers across the operations to manage costs among other strategic positions aimed at improving performance.