ZIMPLOW Limited is confident the new Government will adopt economic policies that favour agriculture, mining and infrastructure in what should positively impact its business. Group chief executive Mr Zondi Kumwenda said President Mugabe clearly indicated agriculture, mining and infrastructure topped the list of Government priorities. The President is expected to announce Cabinet for the new Government this week after Zanu-PF won a resounding victory in the July 31 harmonised elections.
Presenting the group’s results for the half-year to June 30, Mr Kumwenda said: “The strength of this Government is its thrust on agriculture; even globally agriculture is key for economic growth.
“The President announced agriculture will be key. As Zimplow we are poised to benefit from positives coming from the growth in agriculture. We have two sectors that we are market leaders; agriculture and mining.”
President Mugabe has on many occasions pledged Government support to agriculture and even indicated Government would support farmers with inputs this year. He has also unequivocally said that mining would be the centrepiece of Zimbabwe’s economic growth going forward considering the abundant mineral wealth it possesses.
In the case of agriculture and indeed the entire economy to thrive President recognised the critical role that good infrastructure will play, hence the need to address deficiencies. But for the three sectors to optimally positively impact on its business and the economy in general Mr Kumwenda said Government will need to address liquidity challenges.
To overcome liquidity constraints Zimplow borrowed to the tune of US$9,8 million from US$5,3 million and is negotiating a US$5 million line of credit from Brazil.
Mr Kumwenda said the group expects to close the line of credit deal by end of this month. Zimplow revenue rose to US$20 million in the interim from US$4 million having acquired Tractive Power Holdings midway through 2012 and disposing of Puzey & Payne. Profit for the half year came in at US$1,4 million from US$168 000 last year.
Earnings Before Interest Tax Depreciation Amortisation came in at US$1,19 million, most of which is attributable to the mining and construction business. Profit before interest and tax of US$2,2 million was enhanced by sale of Puzey & Payne.
In the face of growing debt collection challenges Zimplow has changed its sales strategy from credit to cash amid tightening liquidity conditions in the domestic economy.
Mr Kumwenda said Tractive Power performed extremely well in the half-year, adding that the draught power implements maker positively contributed to the group.