Listed brick-making firm, Willdale Limited’s sales volumes during the first five months of the financial year 2018 were 13 percent above same period in the prior year and 1 percent above budget on firm demand. This was despite that the period included three months of rainy weather when production is generally depressed.
Speaking to shareholders at the firm’s annual general meeting, chief executive officer Nyasha Matonda said average prices increased 47 percent compared to prior year due to market forces.
“In the first five months of the year we have recorded satisfactory growth sales volumes. We will continue to review prices in line with market forces,” he said.
However, fired production was 14 percent below budget and 23 percent below prior year.
Mr Matonda added production levels were kept low to manage brick losses caused by rains although this year rain damage was not as severe as same period in the prior year.
Management anticipates production and sales volumes to further improve with capacity utilisation of at least 85 percent following planned maintenance during the off-season.
Growth will also be underpinned by the anticipated increased demand for bricks driven by individual residential developments, construction of schools and university accommodation.
According to Treasury, the national housing backlog is currently estimated at 1,3 million which is creating a huge appetite for residential developments and demand for bricks.
Management at Willdale anticipates this demand to continue in the foreseeable future and capitalise on it.
“We are pursuing cluster home developments and Government school projects to improve product mix,” said Mr Matonda.
However, the anticipated surge in production volumes will also depend on the stability of electricity supply, which of late has been problematic.
The board has however lined up strategies to optimise production while containing costs such as increasing production volumes during the dry season sufficient to cover for the wet season, enhance plant efficiencies as well as waste reduction.
In light of foreign currency shortages affecting industry, Willdale indicated they would import substitute and engage local suppliers of spares.
The transport services unit is expected to continue on a growth trajectory in the financial year with four new trucks already added to the fleet, bringing it to 10. Meanwhile, Willdale expects to conclude the sale of its 190,1 hactare land deal transaction by the end of May. This follows approval by shareholders last year to dispose of its excess and unproductive land to raise funds to retire bank loans.
Mr Matonda indicated the land in question did not have clay suitable for brick making, therefore the decision to dispose of it.