Lafarge appoints new CEO

Published: 14 May 2014

French cement maker Lafarge has appointed Amal Tantawi as new chief executive of its Zimbabwean unit.

She succeeds Jonathan Shoniwa who was elevated to executive chairman late last year, following Muchadeyi Masunda's departure.

Prior to her appointment, with effect from March 1, Tantawi was at Lafarge Pakistan Cement Limited.

The Lafarge group, awaiting approval of its indigenisation plan by Zimbabwe, operates in over 64 countries, generating annual sales of around €16 billion.

It owns 76 percent of the Zimbabwean unit while 21 percent is held by locals.

The remaining three percent is foreign-owned.

Zimbabwe's empowerment law compels foreigners to cede 51 percent shareholding to locals.

Meanwhile, the local unit missed a $90 million revenue target by 24,8 percent to record $67,6 million in the year to December 2013 due to reduced local and export sales volumes.

Revenue was 3,3 percent down from prior year's $69,9 million.

Cement demand has generally been subdued due to depressed construction activity with most sales being driven by residential construction projects.

Despite recording an overall 5,6 percent increase in demand from 984 kilotonnes in 2012 to 1 039 kilo tonnes last year, aggregate demand was lower than anticipated.

During the period under review, the Zimbabwe Stock Exchange-listed cement maker's after tax profit dropped 24,5 percent to $3,4 million.

Operating profit before other income, finance costs and tax declined to $5,6 million from $6,8 million due to community donations for indigenisation plan and distribution costs.

The group incurred an additional $154 000 cost as a result of high bank charges and a once off interest cost on some liabilities that have since been cleared, thus, the company's finance costs increased to $692 677 from $538 861 in prior comparable period.

Basic earnings per share dropped to $0,04 from $0,06.

Net cash generated from operating activities increased from $4,7 million in 2012 to $9,1 million on the back of better working capital management policies.

Lafarge said it spent $10,7 million on capital projects with $6,9 million going towards mines development.

This comes as the local unit plans to spend as much as $20 million in the short term towards a major refurbishment programme of its existing plant to augment capacity.

In the long run, it plans to establish a new plant to double output to one million tonnes annually from an installed current capacity of 450 000 tonnes per annum.

Shonhiwa has said that although there were a number of big infrastructure projects, such as the Kariba South power station extension and the Tokwe-Mukorsi dam construction, expected to spur demand, market requirements were predominantly driven by home building projects.

"This is not normal. In the construction industry you expect cement demand to be driven by big infrastructure projects, but today we see housing driving demand," he said, adding they were "looking at between 55 to 60 percent of demand being in residential (construction)."
- Business Live

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