Displaying items by tag: Zimbabwe

Zimbabwe: A deal by Fossil Mines to buy a 76% stake in Lafarge Zimbabwe has been stalled by the introduction of economic sanctions by the US Office of Foreign Asset Control (OFAC). In mid-December 2022 OFAC added Fossil Agro, Fossil Contracting and the group’s chief executive officer, Obey Chimuka, to its Specially Designated Nationals (SDN) list due to alleged links to a previously sanctioned individual, Kudakwashe Tagwirei, and his company, Sakunda Holdings.

OFAC said that Tagwirei had “materially assisted, sponsored, or provided financial, material, logistical, or technical support for, or goods or services in support of, the Government of Zimbabwe.” It accused him of using his relationships with government officials to gain state contracts, to receive access to currencies including the US Dollar and of supplying luxury items such as cars to ministers. It added that Chimuka was a “longtime business partner” of Tagwirei. Fossil Agro was also linked to a mismanaged agricultural subsidy scheme.

In a statement Lafarge Zimbabwe said that it was “considering various courses of action with a view to protecting the business and the interests of all stakeholders.” The deal to sell a majority stake in the subsidiary of Switzerland-based Holcim was originally finalised in early December 2022.

Zimbabwe: Fossils Mines has appointed Innocent Zulu Chikwata as the acting chief executive officer (CEO) of Lafarge Zimbabwe. Willcort Dzuda has become the acting chief finance officer (CFO), according to the Business Times newspaper. The appointments follow the departure of Geoffrey Ndugwa and Amry El Moufay, as CEO and CFO respectively, following the acquisition of a majority stake in the cement producer by Fossils Mines in December 2022.

Chikwata worked previously as the sales manager and then the commercial director of Lafarge Zimbabwe since joining the company in 2017. He holds over 15 years of experience in the construction materials and consumer packaged goods sectors. Dzuda is a chartered accountant and registered public auditor. He holds 25 years of experience in auditing, consultancy and financial management.

Zimbabwe: Lafarge Zimbabwe has finalised a deal to sell a 76% stake in the company to Fossil Mines. The transaction is now set to conclude once the shares are transferred in exchange for the agreed price. The divestment by the subsidiary of Switzerland-based Holcim was first announced in June 2022. No amount for the transaction has been disclosed publicly.

South Africa: PPC’s earnings fell by 12% year-on-year to US$42m in the six months to September 2022, excluding its subsidiary in Zimbabwe due to hyperinflation. In South Africa and Botswana the group reported higher sales in coastal regions due to less imports but tougher conditions inland that led to a 2.6% fall in cement sales volumes. Despite this, it raised its revenue through price rises. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 29% to US$29.9m. Performance was better in Rwanda where its Cimerwa subsidiary increased its sales volumes by 11% and its EBITDA by 63% to US$14.5m. PPC Zimbabwe’s sales volumes declined by 13% due to a planned kiln shutdown in the first quarter and margins were negatively affected by the use of imported clinker primarily from PPC South Africa and increased maintenance costs. However, sales volumes improved in the second quarter. EBITDA fell by 48% to US$8.59m.

Roland van Wijnen, the chief executive officer PPC, said, “The PPC group continues to deliver sound cash generation and deleverage the balance sheet despite difficult trading conditions in its core South African and Botswana cement market, offset by positive trading conditions in its Zimbabwe and Rwanda operations. To maintain volumes in the South African and Botswana cement markets, sales price increases were limited to 5% in the period under review. Key input costs, especially those related to fuel and energy, increased at double-digits in percentage terms.”

China/Zimbabwe: A cement producer in China has imported 20,000t of coal from Zimbabwe. The Zimbabwean Coal Producers Association said that the Port of Beira, Mozambique, despatched the order. Mining News has reported that the shipment is a trial, with other orders also anticipated.

Zimbabwe: A court has ordered Lafarge Cement Zimbabwe to pay US$321,000 to supplier Rubtech Machinery and Spares, in addition to costs. The Standard newspaper has reported that the producer incurred a debt to Rubtech Machinery and Spares for its services in November 2020. Fossil Mines since acquired Lafarge Cement Zimbabwe from Switzerland-based Holcim in June 2022.

Zimbabwe: Government capital controls are delaying the handover of a new vertical cement mill ordered from China-based CBMI to Lafarge Zimbabwe. The cement producer still owes the supplier US$5.2m but has been unable to make the payment due to economic measures the government has taken to avoid depreciation of the local currency, according to the The Insider newspaper. The subsidiary of Switzerland-based Holcim is unable to obtain a certificate of completion from the supplier until the transaction has been completed. CBMI handled the order and Germany-based Gebr. Pfeiffer supplied the mill. The outstanding debt to CBMI may also delay Holcim’s deal to sell Lafarge Zimbabwe to Fossil Mining, which was announced in June 2022.

Zimbabwe: Part of Lafarge Zimbabwe’s approved US$25m capital expenditure investments will go towards further expanding the company’s cement capacity in order to meet local demand. The company also plans to establish a new dry mortars plant. Lafarge Zimbabwe is on track to commission a new vertical roller mill at its Manresa grinding plant in early 2023. Lafarge Zimbabwe’s chief executive officer Geoffrey Ndugwa said, “The overall market demand continues to grow, driven by the segment of individual home builders as well as the ongoing major government infrastructure development projects. The company is confident that volumes will recover and grow as the availability of cement stabilises.”

South Africa: PPC’s full-year consolidated sales were US$624m in the 2022 financial year, which ended on 31 March 2022, up by 11% year-on-year from US$561m in the 2021 financial year. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 6.9% to US$94.5m from US$101m. During the year, the group reduced its debt by 55% to US$63m from US$139m.

The group noted high cement demand across its markets in the 2022 financial year, including a sales volumes increase of 28% year-on-year in Zimbabwe. It also noted a 19% year-on-year increase in South African cement imports, mainly from Vietnam, which constituted 10% of sales in the 2022 financial year. PPC said that it will ‘immediately make additional capacity available’ to capture the increased demand through the rest of 2023 financial year.

Zimbabwe: Fossil Mines plans to keep Lafarge Zimbabwe publicly traded and to recapitalise it through investments after it completes its acquisition of the company. The Insider newspaper has reported that this will lead to an increase in the company’s cement production.

Zimbabwe consumed 1.4Mt of cement in 2021, of which 560,000t (40%) was imported. Switzerland-based Holcim agreed to sell its 76% stake in national number two producer Lafarge Zimbabwe to Fossil Mines earlier in June 2022.