The Sunday News
Judith Phiri, Business Reporter
AGRO-INDUSTRIAL implements manufacturing firm, Zimplow Holdings has said it was left in a financial loss following Barloworld’s termination of distributorship of heavy mining and construction equipment, despite expected recovery of the two sectors in the country.
Barloworld Equipment UK which owns Caterpillar (CAT) ended its relationship with Barzem Enterprises, a subsidiary of Zimplow, last year in September.
The distributorship arrangement had been going on for over 70 years ago. Barloworld is now distributing Caterpillar heavy equipment in the Zimbabwean market on its own.
In a statement accompanying the trading update for the year ended 31 December 2022, Zimplow Holdings chairman, Mr Godfrey Manhambara said the financial year 2022 was a challenging year for them.
Zimplow Holdings
“The financial year 2022 was a challenging year for Zimplow given the difficult trading environment and termination of the caterpillar dealership in September 2022.
The discontinuance of Barzem operations resulted in Group profitability swinging from an operating profit position to a loss before tax of ZW$1 billion,” said Mr Manhambara.
He said this was caused by provisions recorded of ZW$7.4 billion being stock write downs of ZW$6.4 billion, exchange losses of ZW$0.5 billion and retrenchment costs of ZW$0.5 billion.
Mr Manhambara said the board was following through on protecting shareholder value by acquiring Barloworld’s 49 percent shareholding in Barzem at a discount in line with the remedies provided in Barzem’s shareholder agreement.
“Overall, the continuing operations recorded a resilient performance which we are now building on going into the financial year (FY) 2023.
The Group will follow through on its strategy to position the Group as a one stop shop for equipment, parts and service.”
Mr Manhambara said management will follow through on sustaining the key initiatives undertaken during the year under review as we they go into 2023.
These include extracting the efficiencies and synergies in the new structure, to deliver more sustainable results, while significant costs savings are expected after full implementation of the restructuring process and the Group restored to peak business levels.
He said they will be getting the newly introduced business unit, Tractive Power Solutions (TPS) to gain the targeted market share in earth moving equipment, parts and service supply to customers.
“TPS is establishing itself as the go to partner for technical solutions such as repair and maintenance contract (or onsite solutions) for huge fleet owners as well as workshop solutions given the Group’s expansive back infrastructure,” he added.
Mr Manhambara said they will be driving resilience in the two leading tractor brands under Zimplow, Massey Ferguson and Valtra by running them under separate business units, Farmec and Valmec respectively.
While, in addition, there has been a deliberate follow through on the expansion of the product range at Mealie Brand to include small-scale mechanisation implement for 20 horsepower (Hp) to 50Hp tractors including 2WT range.
He said the group was committed to its strategy of stabilising the logistics and automotive cluster, building resilience in the agriculture equipment cluster and transforming the mining and infrastructure equipment cluster.
