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Senior Business Reporter
FARM equipment maker Zimplow Holdings’ total implements volumes grew five percent in the year ended December 31, 2014, spurred by a blossoming export demand of 11 percent compared to the prior year.Group chairman Zivanayi Rusike said agriculture volumes grew despite sacrifice on margins.

“Mealie Brand total volumes of implements grew by five percent from last year, mainly due to an increase in exports. Export implements grew by 11 percent from last year on the back of increased demand from our traditional export markets, as well as product mix which included conservation tillage equipment,” he said in a statement accompanying the firm’s financials for the period.

“The surge in exports also contributed to the decline in margins as export prices tend to be lower than those for the local market.”

Rusike said local implements dropped slightly by two percent against the 2013 performance.

He said local parts absorption was encouraging, with volumes increasing by 89 percent from those achieved in the prior year.

“Growth was experienced on the back of lower  prices, particularly on ground engaging parts. Farmec tractor volumes increased by 45 percent from last year, again on the back of lower prices to the customers,”  he said.

The company’s total market share had returned to a level where they wanted it to be, said Rusike, adding that the introduction of Valtra tractors was encouraging as they had a good market penetration rate.

Mechanically drawn implements’ volumes also increased by 29 percent during the period under review.

“Generator sales were a little disappointing, recording an 18 percent decline over the previous year.

Northmec tractor sales declined by eight percent from last year’s achievement while implements grew threefold.

Afritrac implement volumes grew by 10 percent from the previous year due to a better off-take in Lesotho.

“Parts sales, however, dropped by 15 percent. Margins for agriculture units tumbled on the back of product mix as well as a swing of sales towards high volume and lower margin products,” he said.

On its mining construction and power division, Rusike said Zimplow’s Barzem whole goods were down by 47 percent compared to the same period last year.

“This has been mainly due to a combination of competition from lowly priced brands from the East and a number of capital expenditure projects being postponed by many contractors due to tight liquidity conditions prevailing in the economy.

“The high cost of finance has also precluded the company from entering into meaningful asset based finance structures.  Power generation units were disappointing declining by 32 percent from last year’s achievement,” he said.

Rusike said CT Bolts had a disappointing year, recording a decline of 30 percent in volumes and this is the lowest sales ever since its acquisition.

He said during the period, the group’s revenue declined by 10 percent from that of 2013.

“Margins were negatively affected by the product   mix as well as price pressures within the agriculture  unit.  The margin swing resulted in a $1 million loss on margins on current turnover. Operating expenses remained static in comparison to the prior year,” said Rusike.