Latest updates from Masimba, Cafca signal growing construction demand

Latest updates from two major players in the construction business, Masimba Holdings and Cafca, provide a window into growing demand in the industry.

Masimba Holdings, one of the country’s biggest construction firms, says its order book has “grown significantly” since the start of the year. Most of the new business is in roads, housing and mining, the company says in a trading update.

“The group’s order book comprising of roads, housing and mining infrastructure has grown significantly since the beginning of the year and is poised to result in increased performance in the current year,” Masimba says in the update for the three months to March.

The company cautions, however, that “the speed of execution of the order book will largely depend on the continued stability of the macroeconomic environment and government policies being consistent”.

Masimba has won contracts in mining, where firms such as Zimplats are building new mines. Masimba is also one of five locals firms repairing the Beitbridge-Harare highway. The government has recently announced a plan to float a US$250 million bond to speed up works on the highway.

Says the company: “The government of Zimbabwe has committed to an aggressive rollout of roads, water, agriculture, housing and energy infrastructure, in which markets the group is a significant player.”

Treasury budgeted ZWL$139.8 billion for infrastructure investment in the 2021 budget to fund roads, dams, housing and public buildings. Zimbabwe’s infrastructure lags well behind that of its regional peers.

Cafca: local sales, exports up

Another indicator of recovery in construction comes from Cafca, the country’s largest manufacturer of cables. The company makes cables used for electricity and telecommunications, supplied for domestic and industrial customers at home and in the export market.

In the six months to March, Cafca sold 1,175 tonnes of cables. This was 41% more than what it sold over the same period last year.

“Sales are buoyant in the following sectors – mines, retail, construction and industry,” Cafca said in its latest financials. The company says “local sales in the buoyant sectors should continue” in the current quarter.

The company is likely to benefit from growing renewable power investments by mining companies.

Exports were up 52%, but the company warns that sales may be affected by world copper prices.

Masimba shares closed at Z$2,500 while Cafca traded at Z$11,000 on Thursday.