Willdale bets on Haydon Industrial Park

BUSINESS REPORTER

Willdale Limited, the country’s leading manufacturer of clay bricks, is pinning its recovery strategy on accelerated stand sales at the Haydon Industrial Park, aiming to raise enough capital to acquire a modern all-weather brick-making plant before year end, Business Times can report.

In a first-quarter trading update for the period ended December 31, company secretary Mavuto Munginga said servicing of Phase 1 of the Haydon Industrial Park is progressing steadily, with strong market interest already translating into sales.

“The sale of stands in the Haydon Industrial Park has begun to ease working capital pressures, and stock levels are expected to improve significantly in Q2,” Munginga said.

He added that successful capital-raising initiatives would be pivotal in restoring production capacity and funding the acquisition of a state-of-the-art brick plant.

“Successful capital-raising efforts will restore production capacity and support the acquisition of a modern brick plant. Combined with our quality-focused production systems, this will enhance competitiveness. The strategic location of our land projects within the new city will support demand and generate strong returns throughout the year,” he said.

Stand sales, which commenced in December, have already supported critical plant maintenance and eased working capital constraints. The company expects these disposals to generate sufficient funding to acquire the new plant in line with its medium-term growth strategy.

Meanwhile, development permits for Phase 2 of Haydon Industrial Park and the Tenerife project remain pending approval. Munginga said the Smartsuburb project, in which the company has an investment stake, is expected to commence before March 2026.

“These projects are expected to deliver strong returns and provide resources to stabilise and grow the business in the short to medium term,” he said.

Despite a relatively stable macroeconomic environment characterised by minimal inflation and exchange rate volatility, Willdale reported subdued performance during the quarter under review. The company attributed this to persistent liquidity constraints, which restricted access to working capital and capital expenditure funding.

Production remained significantly below installed capacity despite firm demand, as intensifying competition from a growing number of brick manufacturers compounded operational challenges.

“Limited working capital negatively affected production, with extrusion volumes down 28% and fired production down 52% compared to the prior year. Consequently, sales volumes declined by 49% due to low stock availability,” Munginga said.

Revenue for the quarter fell 36% year-on-year, largely driven by reduced stock availability. However, average selling prices rose 28%, reflecting a targeted sales mix strategy aimed at preserving margins in a constrained operating environment.

The company expects revenue and profitability to rebound in the second quarter as production recovers and stand sales gain momentum.

Willdale remains cautiously optimistic that government initiatives promoting local manufacturers under the National Development Strategy 2 framework will stimulate infrastructure development and expand domestic demand, positioning the company for a stronger performance in the months ahead.