COMPANY PROFILE OF ZIMPLOW LIMITED

The company was incorporated in 1939 as Rhodesia Plough and Machinery Company.  The name was changed to Zimplow Limited after independence.  It is listed on the Zimbabwe Stock Exchange.

The Company has three divisions under its wings: Mealie Brand, CT Bolts and Tassburg

MEALIE BRAND DIVISION.

The division is engaged in the manufacture of animal drawn farm implements, hoes and associated spare parts.

It actively markets its products in South Africa, Lesotho, Swaziland, Namibia, Zambia, Mozambique and East Africa.

The major competition is from China and India.

Currently, exports account for 56% of the company’s turnover in volume terms.

51% of the company’s raw materials are locally produced while 49% are imported.

CT BOLTS DIVISION

CT Bolts is a division that is involved in the distribution of fasteners in Zimbabwe.  The business commenced in 1954 in Bulawayo and employs a total of 135 workers. It became part of the Zimplow group in 2006.

The business supplies every sector in Zimbabwe from agricultural and mining to automotive and manufacturing sectors.  Besides distribution, the division has a specialized fastener manufacturing section.

TASSBURG DIVISION

This division was acquired in December of 2008 and is involved in the manufacture of woodscrews, pop rivets, verandah bolts and high tensile bolts and nuts.  It serves predominantly the construction, furniture and mining industries.  Currently, the business is constrained by low activity in the economy and competition from the East.  Going forward, the bolt plant will be moved to Bulawayo while the screw and pop rivet plant will stay in Harare

GROUP STRATEGIC POSITIONING

The Company’s strategic positioning in the industry would fundamentally look unattractive because of the following reasons:

a)Dependence on imported raw materials

b)Threats from Chinese and Indian imports

c)Shortage of foreign currency as well as a very weak currency

d)Threats from competition such as, Hastt, Glynns Bolts, and other small to medium enterprises that have cropped up.

e)Entry/Exit barriers are weak.

f)Dependence on the RBZ orders especially in 2007/8 season.

g)Ever-increasing world steel prices

h)Affordability of implements to the small-scale farmer.

However there are some upsides to the company’s positioning:

a)Exports account for more than 50% of the company’s manufactured output.

b)Experienced management team and workforce.

c)Ability to take advantage of synergies within the group in terms of both plant rationalization and use of excess foreign currency.

d)Well established regional and local distribution network

e)Very strong brands, which are registered and protected in sub-Saharan Africa.

f)The customers of CT Bolts are a broad range of customers covering almost all industries.  The company has consistently supplied these companies.  This fits in with Mealie-Brand’s distribution requirements.

Going forward:

The business would like to continue to grow exports particularly in Angola and Zambia to militate against a declining local market.

It will also continue to pursue both organic and strategic acquisitions.