Zimplow Acquires 49% Of Barzem To Regain Dominant Position In Equipment Business
Zimplow Holdings Limited is set to acquire a 49% stake in Barzem from Barloworld. This move will restore the group’s dominant position in the agriculture and earthmoving equipment business by year-end.
Barzem, a joint operation with Barloworld, ended its Caterpillar (CAT) dealership in September 2022, negatively impacting the group’s overall performance. The group is now buying out Barloworld from the business, which has transitioned to Tractive Power Solutions (TPS).
The group’s company secretary, Mrs Sharon Manangazira, confirmed that the acquisition is close to completion and is expected to boost overall performance in the current financial year. In a trading update for the first quarter to March 31, 2023, Mananganzira said:
Zimplow is at an advanced stage in concluding the acquisition of the 49 percent in Barzem, in line with the provisions of the shareholders’ agreement.
This development is set to propel the performance of the group’s new business Tractive Power Solutions (TPS), which was set up in order to provide earthmoving and heavy equipment solutions to its clientele.
Mananganzira further said Tractive Power Solutions (TPS), which was launched in the previous financial year, has received positive feedback from customers who were previously served by Barzem.
She said although the group has not yet secured exclusive distribution through an internationally acclaimed Original Equipment Manufacturer (OEM), TPS’s technical competence and expertise in running an earthmoving dealership have enabled Zimplow to offer a comprehensive one-stop-shop for earthmoving equipment fleet owners.
The group has already secured service level agreements, repair and maintenance contracts, and various on-site solutions with major fleet operators in the country. While the transition from CAT distributorship has not been without challenges, the group anticipates that it will have successfully repositioned itself in the earthmoving equipment sector by year-end.
Mananganzira added that during the first quarter, the group’s performance was 8 percent behind the prior year period due to delays in receipts from key customers in agriculture and logistics sectors. The liquidity constraints in the market have negatively impacted the productive sector-related businesses, with major off-takers of agricultural products suffering from cash flow gaps, delaying payments to farmers and affecting scheduled equipment replacement programs.
Despite the challenging environment, the group has secured orders to support recovery in the second and third quarters. The capacitation program continues to offer improved efficiency and product diversification opportunities. The mining and infrastructure equipment and service businesses have seen positive performance, while the logistics and automotive products and service businesses have faced delays in deliveries.