Listed brick making firm, Willdale Limited is converting its land banks into residential developments as part of a capital raise for acquisition of machinery to enhance production at its brick manufacturing plants.
In a circular to shareholders, Willdale indicated it had approximately 165,6 hectares in Mt Hampden, an area that is fast developing owing to the new Parliament Building and the new city located nearby.
This, according to chairman Mr Cleophas Makoni, creates rationale for the company to venture into residential developments, to take advantage of the rising demand in the area. This has presented an opportunity to develop the land into residential, commercial, and industrial stands.
But, that’s not all the company has.
“Furthermore, the company has excess idle land in Christmas Gift, Gweru, measuring approximately 12,6 hectares, bringing the total land available for development to about 178,2 hectares,” said Mr Makoni.
According to Mr Makoni, proceeds from the development will be channelled towards the acquisition of a new plant, making the company’s bricks of higher quality and enabling the company to compete effectively locally and in the region. Currently, the land banks are valued at a cumulative US$2,95 million and developing it will significantly increase its value, and add to the required equipment.
“The company’s current manufacturing plant only allows for seasonal production of bricks, with full-scale production happening between March and November, while the production plant is shut down for up to three months from December to February each year because of the need to use natural sunlight for drying bricks before they are fired.
“This effectively means that there exists scope for the company to optimise its production capacity by mitigating the downtime occasioned by the aforesaid seasonality,” said Mr Makoni.
Willdale has also highlighted that technology is available to enable all-year-round production of bricks, and such technology involves the use of tunnels, rotary dryers, and kilns.
“The company intends to acquire and install a plant with a rotary kiln and dryer to enhance its production capacity,” he said.
In 2017, the company disposed of part of its land for US$11 million, which was used to service debt and settle preference share obligations.
Willdale intends to seek shareholder approval on the land developments at an extra-ordinary general meeting to be held on April 4, 2024.
“Shareholder approval is therefore sought to give directors the authority to bring the development agreements with the contractors into effect and to allow the directors to enter into similar development agreements for the other identified idle land Christmas gifts,” said Mr Makoni.
In line with the proposal, the company has entered into two development agreements with Zusammen (Private) Limited and Melrose Construction (Private) Limited trading as Integrated Construction for the development of the land into commercial and industrial stands and the subsequent disposal of the developed stands.
