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Sino Zimbabwe Cement Company in Gweru

Lovemore Zigara, Midlands Correspondent
GWERU based cement manufacturer Sino Zimbabwe Cement Company (SZCC) has recorded a 15 percent increase in sales spurred by housing development taking place in the country.

However, the boom in sales has not translated to bigger profits, which have been eroded by a sharp increase in raw material costs.

The company, a joint venture between the Zimbabwean and Chinese governments, has seen some of its major components in the production of cement going up by up to 50 percent.

Mr Yong Wang, SZCC managing director, told Business Chronicle that individuals who are building houses form the bulk of the company’s clientele.

“We have recorded sales volumes, which are more than last year and this is partly because of the housing developments, which are taking place across the country. The other issue is that the cash shortages have also worked in our favour as this has reduced the smuggling of cement into the country as people are using plastic money,” said Mr Yong.

“However, the rise in sales has not translated to more profits for us. In fact, our profitability has been eroded by the increase in raw material costs. You will appreciate that our pricing structure for our products has remains the same for the past two years and but our costs have gone up, which means this has eaten some of our margins.”

The surge in sales is a major turnaround compared to the beginning of the year when the company lost 50 percent of its sales. This was mainly attributed to the incessant rains, which the country experienced in the last season.

The SZCC boss said prospects were brighter for next year given some of the massive capital projects that Government intends to undertake next year.

These include the dualisation of the Beitbridge-Chirundu Highway, refurbishment of the Hwange Power Station, construction of the Parliament of Zimbabwe and expansion of the Kariba South Hydro Power project among others.

He said prospects of economic turnaround were high in the country, which may stimulate the construction industry as investors flock into the country.

SZCC is the third largest cement producer in the country after Pretoria Portland Cement and Lafarge.

The Gweru based firm produces 400 000 tonnes of cement per year and commands a 25 percent market share.

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