The AGM was well attended and all resolutions tabled at the meeting were passed, while shareholders commended the team for a good 2014 performance. Directors revealed that profit after tax and earnings per share increased by 25% to ZMW 424 million and ZMW 2.12, respectively. Profit before tax was up 29% to ZMW 658 million, due to successful implementation of cost control measures, Lafarge Zambia CEO, Emmanuel Rigaux stated:
"Sales volumes were up by 4% to 1.2Mt, although constrained by production capacity, with sales turnover up 22% to ZMW 1,384 million, with a strong demand for innovative and higher-priced products. The second half of the year saw sales turnover up 17% compared to the previous year. Domestic consumption increased by an estimated 20%, driven by numerous infrastructure projects. New sources of alternative fuels were successfully trialled and rolled out in 2015. The Company achieved record cement production, which was up 6% on the previous year to 1,245,000 tonnes."
Lafarge Zambia introduced two new cement products to the market, RoadCem for road stabilisation and Wallcrete for plaster and mortar applications. New products, including SupaSet, represented 23% of overall sales. In addition, the new Powercrete product was launched for the mining sector, while aggregates operations continue to ramp up and made a positive contribution in 2014.
The directors see Lafarge Zambia as well positioned to finance substantial capital expansion projects later in 2015, as profitability has been attributed primarily to favourable sales volumes, the launch of new products and prudent cost control initiatives.
Looking forward, Lafarge Zambia aims to increase production capacity and pursue expansion projects at both Ndola and Chilanga plants, with Ndola expected to be commissioned in June 2015. While site preparations for Chilanga have commenced, the project will start later this year and is due to come on stream before 2018. This initiative is estimated to more than double the capacity at the Chilanga Plant.
"Funding resources for Chilanga are currently being finalised and Ndola expansion project is being financed using internal resources. In 2015, the Company will maintain its focus on customers, cost reduction and innovation, and remain the industry's market leader by providing full construction solutions", stated Mr Rigaux.
The Company has commissioned a Customer Services Call Centre and implemented logistical optimisation and cost reduction programmes to create a high performance environment that will benchmark performance standards against world-class customer service, and establish a process for continuous feedback and improvement.
Demand for product is expected to remain strong in 2015, supported by continued growth in the construction industry in Zambia and the DRC. The Company's "Building Better Cities" ambition will remain at the forefront of its new innovative products and construction solutions, as well as its corporate social responsibility programmes. The recently launched Lafarge Foundation, under the patronage of the Republican First Lady, will now form the new approach towards CSR programmes and other community support initiatives, both in Zambia and the DRC.
The foundation will have a panel comprising of Lafarge members as well as external members, which will make it an independent and transparent entity. The company has made available ZMW 2 million to help start the programme for an initial period of three years.