ZAMBIA’S construction market is likely to record more growth in the second half of this year as investor confidence has been restored after the August 11 elections, Lafarge has predicted.
In the build-up to elections, most investors held on to their investments waiting to see the outcome of the process, thereby negatively affected the construction sector.
Lafarge Zambia chief executive officer Emmanuel Rigaux said the construction sector’s growth in the first half slowed as a result of investor uncertainty due to the elections.
“The market environment in the second half is expected to continue to be challenging both on pricing and volumes, although the end of the electoral period in Zambia may bring back some growth in the construction markets,” Mr Rigaux said in the company’s financial report for the half-year ended June 30, 2016.
In the period under review, however, the company continued to operate in a very difficult environment characterised by tight liquidity, market contraction and competitive pressures in the domestic market.
He said both the Ndola and Lusaka plants strongly reduced their cash costs compared to the first half in 2015 from almost K200 million to about K38.2 million, despite additional power costs.
Mr Rigaux, however, said the firm recorded a reduction in profit before interest and tax from K266 million in 2015 to K49 million in 2016.
He said the company continued to adjust its cost base to remain competitive and fully leveraged the group synergy initiatives in the first half.
Currently, there are three cement producers namely, Lafarge, Dangote and Zambezi Portland.
“Large contracts such as Kenneth Kaunda International Airport and Kafue Gorge Lower among other, continued focus on export as well as the roll out of our new franchise network [Kumanga] should help us mitigate the difficult market conditions in Zambia itself in the coming months,” he said.