Regional lockdowns frustrate Zimplow exports

Oliver Kazunga, Senior Business Reporter
AGRO-industrial concern, Zimplow Holdings Limited, says its export business suffered a 64 percent decline in the first quarter of the year as governments across the region implemented measures to combat the spread of Covid-19.

The novel global Covid-19 pandemic, which was first detected in China towards the end of last year, is a deadly infectious disease that has spread across continents killing thousands of people from more than four million infections recorded so far.

As part of a host of measures to stop the spread of the pandemic as prescribed by the World Health Organisation, governments the world over have embarked on national lockdowns.

In its trading update for the quarter ended March 31, 2020, Zimplow said its export business has not been spared from the negative

“The export business experienced a 64 percent drop compared to prior year as a result of measures taken by regional governments to manage the spread of the novel coronavirus (Covid-19).

“Overall implements volumes have been 54 percent behind the previous year while spares volumes were 47 percent behind the same period last year,” said the group.

Despite a dip in the export business, Zimplow during the quarter under review, it delivered an encouraging first quarter (Q1) performance despite the challenges prevailing in the market.

“The first quarter of 2020 saw improved volume performance across all our units except for Mealiebrand,” it said.

“As a result, revenue was 896 percent ahead of the same period last year, in historical terms. Barzem had a good start to the beginning of the year.

“Q1 equipment volumes were ahead of prior year with eight units sold compared to none last year.”

It said Barzem division palarts sales improved by 24 percent from last year.

Service hours, however, remained at the same levels as Q1 in 2019.

“Powermec’s performance continued to improve with generator units sold being 118 percent ahead of prior year,” it said.

After sales business saw growth in parts by 86 percent, service hours sold jumped 192 percent to 2 105 hours, said Zimplow.

It said the improved responsiveness to power outages by Powermec division unlocked company’s elevated status as the authorised Perkins dealer in Zimbabwe.

“Tractor sales at Farmec remained at the same levels as the prior year while implements volume grew by 100 percent to 40 units sold compared to the same period last year.

“After sales performances were 22 percent down from the previous year with service hours sold down 19 percent to 2 090 hours,” said Zimplow.

The group has been working closely with its principals to provide a complete range of lower horsepower tractors to boost sales volumes and Zimplow is confident that the product development will excite local tobacco farmers.

Furthermore, the realignment of the CT Bolts business during the quarter under review, produced improved results with volumes at 34 percent ahead of the comparative period.

Mild steel bolts improved by 39 percent while high tensile steel bolts grew by 43 percent during the period under review.

“Dry land farmers, the primary customers for Mealie Brand, were affected by drought in the earlier part of the season, and more notably by the Covid-19 pandemic that delayed the opening of the tobacco selling season, which has had an impact on Mealiebrand’s volumes,” said Zimplow.

In light of Covid-19, the group noted that business and communities have been affected by the pandemic globally and as a business, Zimplow will continue supporting industry, the
essential services, agriculture and mining, and people to the best it can.

On the outlook, Zimplow projects that the second quarter will be materially affected by the Covid-19 pandemic.

“We have taken steps to reduce costs and preserve capital. Other than at Mealie Brand demand for our products remains stable,” it said. — @okazunga