Zimbabwe’s second largest cement manufacturing company, Khaya Cement Limited has recorded 15% decrease in production.
In a statement seen by newsreportzim.com, the company’s board chairperson Kumbirai Katsande who presented the details on the company’s performance. Katsande said lower volumes and inflationary pressures weighed down the overall performance of the company to a loss before tax of ZWL 21,5 billion compared to loss before tax in 2021.
“Cement production volumes decreased by 15% as a result of the cement mill roof collapse incident. Production ramp-up after the commissioning of the VCM was also slow as tests had to be conducted before the mill could perform at optimal levels. Sales volumes decreased by 19% in line with the trend in production volumes,” the reads.
After the company has recorded an increase in losses, they managed to identify the causes of the decline in profitability. The board indicated that the company’s performance was adversely affected by raw material shortages, including key imported materials, owing to foreign currency shortages.
The business concluded the implementation of the previously announced US$ 25 million capital expansion programs with the final phase of this three-pronged investment plan was the commissioning of the VCM in 2022, following the successful installation of alternative power infrastructure in 2020 and the completion of the automated Dry Mortars plant in 2021.
“The Company also witnessed increased costs as a result of increased third-party and plant maintenance costs. Consequently, margins dropped to 31% compared to 49.6% in the prior year. The company managed to maintain a tight control over its operating expenditure as total expenses increased by 35.6%,” Katsande added.
