Zimbabwe Stock Exchange (ZSE) listed brick maker, Willdale Limited, says plans are underway to invest US$1 million in additional capacity in order to meet demand largely driven by housing development projects by government and private players.
In the 2021 National Budget, about $1,35 billion was allocated towards the National Housing Fund as the government sought to build 220 000 houses and flats by 2025 in line with the National Development Strategy (NDS1) and Vision 2030.
Nyasha Matonda, the company’s chief executive, told Business & Finance that the company will ensure production will meet the expected demand of bricks.
“We will be enhancing our clay crushing capacity and our mobile equipment for brick movement to the tune of US$1 million,” he said.
Willdale’s annual brick production ranges from 80 million to 100 million, largely depending on demand.
As at June 30, 2021, year to date volumes were 30 percent above prior year as demand for bricks remained relatively high driven by housing development and infrastructure projects.
In 2018, Willdale planned a US$10 million investment on new technology and company officials travelled to China and Italy looking for new technology plant as it sought to enhance its production quality and capacity.
However, Matonda said due to limited funding options of the capital required for the full project, it will be done on a phased approach.
“Because of the limited funding options of capital required, we have decided to do the project in phases and we hope we will be able to get funding for the initial phase,” he said.
He added that most of the projects will be funded by borrowings. The company has previously raised capital through rights issue. The brick maker also disposed of its 190.1 hectares of land that was not suitable for mining clay and raised more than US$4.75 million.
According to Matonda, the company has surpassed most of its targets for 2021 that is for green production, fired, sales volumes and profitability.
In a trading update to June 2021, the group’s revenue grew by 34 percent in the prior year driven by volume growth and effective pricing. The company noted that the revenue growth is expected to remain positive to year end.
The company also noted that it was encouraged by the declining inflation rate and a stable exchange rate which should improve the operating environment.