New city development entices Willdale
Brickmaker, Willdale Limited, says the development of a new city in Mt Hampden presents an opportunity for the company to diversify into property development on its land nearby.
The company is utilising its idle land as part of efforts to raise capital to acquire the latest manufacturing technology at an estimated cost of US$3 million.
Willdale, listed on the Zimbabwe Stock Exchange (ZSE), is engaged in making and selling clay bricks and the company’s products include common bricks, face bricks, semi-faced bricks and paving bricks.
“The company has approximately 165,6 hectares of land in Mt Hampden, an area that is fast developing owing to the new Parliament Building and the new city located nearby.
“This has presented an opportunity to develop the land into residential, commercial and industrial stands,” according to chairman Cleophas Makoni in a circular to shareholders.
He said developing the land will result in the company achieving a significantly higher value for the land compared to its current valuation of circa US$2,95 million.
“The proceeds from the development will then be channelled towards the acquisition of a new plant to make our bricks of higher quality and enable the company to compete effectively locally and in the region,” said Makoni.
Zimbabwe is stepping up efforts to build a new city on Mt Hampden, and a new Parliament building has already been constructed for the city that will gradually become the administrative centre of Zimbabwe.
“Furthermore, the company has excess idle land in Christmas Gift, Gweru, measuring approximately 12,6 hectares, bringing the total land available for development to about 178,2 hectares,” said Makoni.
Similarly, in 2017, the company disposed of part of its land for $11 million, with the proceeds utilised towards servicing debt and settling preference share obligations.
Makoni said the proceeds from the development will then be channelled towards the acquisition of a new plant, making the company’s bricks of higher quality and enabling the company to compete effectively locally and in the region.
“The company’s current manufacturing plant only allows for seasonal production of bricks, with full-scale production happening between March and November, while the production plant is shut down for up to three months from December to February each year because of the need to use natural sunlight for drying bricks before they are fired.
“This effectively means that there exists scope for the company to optimise its production capacity by mitigating the downtime occasioned by the aforesaid seasonality,” he said.
The chairman highlighted that technology is available to enable all-year-round production of bricks, and such technology involves the use of tunnels, rotary dryers and kilns.
“The company intends to acquire and install a plant with a rotary kiln and dryer to enhance its production capacity,” he said.
According to the circular, the proposed manufacturing technology benefits include reduction of production waste, production cost and production being all year round rather than seasonal. Other benefits include an environmentally friendly production process and international competitiveness.
“In order to fund this new plant, the company intends to tap into its land banks through the proposed Haydon, Kinvara, and Christmas Gift partnerships to unlock value and channel this into the growth of the business.
“Shareholder approval is therefore sought to give directors the authority to bring the development agreements with the contractors into effect and to allow the directors to enter into similar development agreements for the other identified idle land Christmas Gifts,” Makoni said ahead of an extraordinary general meeting to be held on April 4, 2024.
Makoni said the company’s management has entered into two development agreements with Zusammen (Private) Limited in respect of four pieces of land measuring approximately 123,6 hectares at Haydon, Mt Hampden.
The principal objective of the aforesaid Haydon Development Agreement is the partnering of the company with Zusammen as the contractor to achieve the development of the 123,6 hectares of land into residential, commercial and industrial stands and the subsequent disposal of the developed stands.
Melrose Construction (Private) Limited trades as Integrated Construction has 42 hectares of land to be subdivided into commercial and industrial stands and the subsequent disposal of the developed stands.
In sync with the development of the new city, construction of the Zimbabwe Cyber City, a modern capital in Mt Hampden, has also begun with the first phase of 50 villa units out of 233 units expected to be delivered within the next 18 to 24 months.
The cyber city, bankrolled by Mulk Holdings International, will make Zimbabwe the first African country with a smart capital city built from scratch and will usher in a new era of economic and social development for Zimbabwe.
Zim Cyber City will facilitate special window clearance of blockchain and digital assets licences and bank accounts, cutting-edge office spaces, and high-end residential living for all individuals and entities operating and living in the community.-ebusinessweekly