Power outages hit Willdale
CLOUDINE MATOLA
Zimbabwe’s largest brick-making company Willdale Limited says crippling power interruptions have severely impacted its production, causing a 16% decrease in output in the quarter to December 31, 2023.
The majority of businesses experienced 12-hour power interruptions in 2023, which had an impact on throughput and efficiency.
Willdale’s sales volumes consequently decreased by 9% throughout the reviewed period.
The company will continue to work with ZESA, according to corporate secretary Mavuto Munginga in a trading report.
“Production declined by 16% because of electricity load shedding. As a result, sales volumes dropped by 9% compared to the prior year. We will continue to engage ZESA to improve electricity supply to the operations,” Munginga said.
She claimed that even with the decline in volume, demand for bricks is still driven by the development of cluster homes in urban areas.
“Demand for bricks remained high though, driven largely by the construction of cluster homes in urban areas,” Munginga said.
Although sales volumes decreased, revenue for the company increased by 130% in the period under review compared to the prior comparative year due to the exchange rate distortions.
Given the rising percentage of transactions in United States dollars Willdale is now considering switching to the greenback as its functional currency.
Munginga added that there has been a rise in building projects with cluster home development, educational infrastructure and shopping centres dominating the list of projects. Furthermore, Munginga said that despite growing competition in the common brick market, the rise in construction projects offers potential for real growth. Additionally, strategies are being pursued to improve the product mix and maximise margins from high value brick varieties. The brick-maker also said the business remains viable with a model that continues to provide required working capital to support operations.
The tax policies implemented this year, such as the reclassification of clay bricks as subject to value-added tax (VAT), may, however, have a short-term detrimental effect on company, particularly on price-sensitive clients who are not registered for VAT and are therefore unable to recoup input tax.
