LAFARGE Cement Zimbabwe plans to spend over $10 million in plant upgrade to increase product output to 500 000 tonnes per year.
The company is producing about 390 000 tonnes per annum.
Speaking at the launch of the company’s new product, Superset cement in Harare on Monday, Lafarge Cement Zimbabwe chief executive officer Amal Tantawi said the group was looking at spending between $10 million to $15 million in plant upgrade.
But Tantawi said although the funds were already available, the plant upgrade will not be launched anytime soon as studies were still ongoing.
Tantawi said currently, the plant has the capacity to produce 450 000 tonnes per annum,but was producing below the capacity.
She said the general economic situation prevailing in the country does have the implications on the company, but so far the cement manufacturer was happy with the results.
“We are almost at 100% from our milling capacity and this is why we are looking into the files and we are considering adding some milling capacity by upgrading the bottleneck in the milling capacity,” Tantawi said.
“Our 100% will be something close to 500 000 tonnes a year, but currently from the existing milling capacity we produce something like 390 000 tonnes a year.”
She said the company market share was at 40%.
Tantawi said the liquidity crunch was not affecting demand, but has an impact on payments for the products.
She said the group has put in place incentives on cash and early payments to encourage a cash payment culture.
Tantawi said the credit facility was accessible to clients who had a good credit rating and the facility was for 30 days.
Speaking at the same event Lafarge Cement chief finance officer Farai Matanhire said the new product — Superset Cement — was expected to grow revenue by 10% and the demand increase was expected to contribute between 30 to 45% in revenue.
“As we start the project, obviously it starts on a low scale, but it’s more for setting launch base in preparation for the economic uptake that we expect.
“So we are starting on a small note — and revenue contribution probably around up to 10% as we start — but obviously depending on demand. The initial projections is around 10%, but as we grow it will get to around 30% up to 45% and above,” Matanhire said.