How Zimbabwe listed construction firms are cashing in on growing infrastructure spending

As construction spending by government, mines and individual home builders grows, the tills are ringing at some of Zimbabwe’s listed companies.

Between January and June, the Zimbabwe government spent $21.2 billion on capital projects, according to Treasury data. Of this, $1.4 billion went into one of government’s roads rehabilitation projects, the Emergency Road Rehabilitation Programme. There was additional spending on the Beitbridge-Harare highway.

Apart from government, mining companies and Zimbabweans building their own houses are increasing demand for construction materials, from cement to bricks and other materials. House construction is mainly driven by Diaspora money, increased bank lending and the informal market, according to industry executives.

And construction companies are lapping it all up, as their results show.

Here, newZWire looks at how the infrastructure spending is keeping the wheels turning at seven listed construction firms.

PPC

The cement company says in the six months to September, its cement sales volumes were expected to grow by between 14%-18%. Where’s the demand from? It’s coming from retail sales – that is individual buyers – as well as demand from companies that make concrete products, as well as government contracts.

When compared to the same time in 2019, before COVID-19, PPC sales volumes are up by 25%-29%.

The projects that PPC is supplying include; the Hwange power station expansion, the recently completed Muchekeranwa Dam, Gwayi-Shangani Dam, the new Manyame Air Base Hospital, National University of Science and Technology (NUST) student accommodation, RG Mugabe International Airport, the Beitbridge-Harare highway and the Beitbridge Border Post expansion.

Masimba Holdings

Revenue at Masimba for the six months to June grew 58%, mainly driven by a firm order book in mining, infrastructure and roads. It is one of the five companies on the Beitbridge highway project.

According to the company, the revenue earned in US dollars, as a proportion to total revenue, improved to 35% from 20%. This is because the company has built up a “diversified project portfolio”, that evenly balances both government contracts and private clients.

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