DIVERSIFIED firm, Zimplow Holdings Limited (Zimplow) is in the process of insulating itself against the El Ni\u00f1o-induced drought and softening mineral prices, as these challenges will negatively impact its bottom line.<\/p>\n
Zimplow provides agricultural, mining and infrastructural engineering quality and innovative equipment solutions.<\/p>\n
Under the agricultural segment, it operates its Farmec, Valmec and Mealie Brand business units, whereas, for mining, it owns Tractive Power Solutions, Powermec and CT Bolts.<\/p>\n
However, with the El Ni\u00f1o-induced drought expected to lower agricultural output and global mineral prices expected to reduce revenues, companies in both segments are expected to cut capex and thus affect Zimplow contracts.<\/p>\n
\u201cThe group is expected to face headwinds in FY2024 as a result of the El Ni\u00f1o-induced drought and the corresponding downstream effects thereof, the harsh economic operating environment which is expected to persist into 2025 and the impact of the soft mineral prices resulting in mines retreating or delaying expansion and capital expenditure spend,\u201d Zimplow acting group chief executive officer Willem Swan said in the company\u2019s 2023 annual report.<\/p>\n
\u201cHowever, the group is insulating itself from the effects of these macroeconomic factors through executing its factory capacitation, the launch of the newly-acquired OEM\u2019s [original equipment manufacturer] business turnaround of the loss-making entities as well as embarking on group-wide cost containment measures.\u201d<\/p>\n
This comes as the firm was seeking to prioritise its earthmoving and heavy equipment solutions in the mining and infrastructure segments to become a major income earner for the overall business.<\/p>\n
\u201cDespite the challenging economic environment as well as the depressed financial performance, the group followed through on the following initiatives which anchored its current year\u2019s strategy: Launch of the Valmec Division which entailed separation of two leading tractor brands under Zimplow, the Massey Ferguson and the Valtra brands, to operate as two separate product offerings,\u201d Zimplow chairperson Godfrey Tsikayi Manhambara said.<\/p>\n
\u201cValmec was strategically established with the primary objective of propelling the growth trajectory of the Valtra brand as well as to offer alternative farm equipment and cost-effective aftersales solutions to the group\u2019s customers. Successful establishment of the Trentyre Harare branch, thereby decentralising processes and enhancing motoring customers\u2019 experience through greater convenience.\u201d<\/p>\n
In the year ended December 31, 2023, the group recorded a 29% reduction in revenue to US$32 million from the prior year.<\/p>\n
According to the firm, the drop in revenue was due to its former earthmoving equipment firm, Barzem, not trading during the year following the termination of its Caterpillar distributorship agreement in September 2022.<\/p>\n
Caterpillar, also known as CAT, is an American construction, mining and other engineering equipment manufacturer.<\/p>\n
\u201cThe acquisition of Barloworld Equipment UK\u2019s 49% shareholding in Barzem Enterprises (Pvt) Limited by Zimplow was successfully completed. Barzem became a wholly-owned subsidiary with effect from March 2024,\u201d Zimplow said.<\/p>\n
\u201cThis business unit is earmarked to become a property holding company following the conclusion of the above-mentioned transaction. Tractive Power Solutions will utilise the entirety of Barzem\u2019s infrastructure in its operations.\u201d<\/p>\n
The lower revenue recorded last year was also due to the late onset of summer rainfall of the 2023\/4 cropping season that dampened demand in Zimplow\u2019s agricultural cluster.<\/p>\n
Lastly, the impact of the economic headwinds resulted in a contraction in customer spending across the group.
\nhttps:\/\/www.newsday.co.zw\/business\/article\/200028828\/zimplow-insulates-self-against-el-nino-softer-mineral-pricing<\/p>\n","protected":false},"excerpt":{"rendered":"
DIVERSIFIED firm, Zimplow Holdings Limited (Zimplow) is in the process of insulating itself against the El Ni\u00f1o-induced drought and softening mineral prices, as these challenges will negatively impact its bottom line. Zimplow provides agricultural, mining and infrastructural engineering quality and innovative equipment solutions. Under the agricultural segment, it operates its Farmec, Valmec and Mealie Brand […]<\/p>\n","protected":false},"author":1,"featured_media":2728,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[15],"tags":[],"class_list":["post-2740","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-updates"],"_links":{"self":[{"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=\/wp\/v2\/posts\/2740","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2740"}],"version-history":[{"count":1,"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=\/wp\/v2\/posts\/2740\/revisions"}],"predecessor-version":[{"id":3126,"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=\/wp\/v2\/posts\/2740\/revisions\/3126"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=\/wp\/v2\/media\/2728"}],"wp:attachment":[{"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2740"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2740"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ctrade.co.zw\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2740"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}