After 70 years as the distributor of Caterpillar earthmoving equipment in Zimbabwe, Barzem, a unit of Zimplow, is exiting the relationship and looking for a new supplier.
Barloword will now directly sell Caterpillar equipment in Zimbabwe.
Caterpillar, the world’s leading maker of construction and mining equipment, has been shifting strategy globally, including exiting from the coal and soft rock underground mining business to focus on other mining technology.
Barzem says the CAT relationship will end in September, at a time when it was seeing strong demand for equipment due to demand from government infrastructure and mine expansion projects.
“Barzem will exit the Caterpillar distributorship on 30 September 2022 given the changes in the strategic direction by both the supplier and Zimplow Group,” Zimplow says in its full-year financials for 2021.
The company says the Cat withdrawal will hurt business performance initially, but it believes it has enough capacity to deal with the change.
“One of the key strategic matters the group is currently seized with is the search for a new OEM (original equipment manufacturer) of earthmoving equipment to replace the Caterpillar brand at the end of the Distributorship Agreement on 30 September 2022.”
The end of the Barzem-CAT partnership does not mean that CAT is leaving the Zimbabwe market. Barloworld will now distribute CAT brands in Zimbabwe.
Says Barloworld CEO Emmy Leeka: “We will continue to be the country’s strategic partner in the growth and development initiatives of its key economic sectors.”
Barzem has seen good business from government and the mining industry. Volume sales of earthmoving equipment rose 84% last year, due to demand from government road projects and mines.
“On the other hand, the focus on production by major mining houses who use CAT surface mining and handling equipment resulted in increased fleet maintenance. Consequently, parts sales grew by 75% and hours sold by 65% against prior year performance,” Zimplow says.
This helped Barzem more than double revenue for the year.
Elsewhere in Zimplow’s business, Farmec sold 48% more tractors than in the previous year, but a poor rainfall season hit sales of other farm implements under the Mealie Brand unit.
Powermec, the alternative power division, had a mixed year. Because power supply was better than in the previous year, it sold 16% less diesel generators. However, it has gone into solar, and that unit grew sales by 167%.
Says Zimplow: “The trading environment has continued to pose both opportunities and threats.”
In 2021, John Deere announced it was expanding its construction equipment line-up to 18 countries, including to Zimbabwe.