PPC to double output

HARARE - Pretoria Portland Cement (PPC)’s Zimbabwe unit Portland Holdings Limited (PHL) plans to double cement output to two million tonnes on completion of its $200 million plant in Mashonaland Central.

The cement manufacturer on Thursday said feasibility studies on the construction of the new plant were at an advanced stage.

“The new plant will cater for Zimbabwe and the Mozambican market. It will complement PHL’s two manufacturing plants in Bulawayo and Collen Bawn, which are producing nearly one million tonnes of cement per year,” PPC’s chief executive Ketso Gordhan said on the side-lines of the company’s centenary celebrations.

Gordan said PHL, together with PPC’s non-South African subsidiaries, would also increase its revenue contribution to the group to 40 percent from the current 21 percent by 2016.

Last year, PPC acquired a 27 percent stake in Harbesha Cement in Ethiopia and a 51 percent stake in Cimerwa Cement, Rwanda.

The increased capacity will enable PHL to increase its exports in the region.

Gordhan added that a significant investment had already been made in exploration and drilling at two locations in Rushinga and another one in Mashonaland Central.

“We will choose the best spot with quality limestone within the area. Furthermore our plan is to create an ultra-modern plant design so that we realise optimal efficiency. Our plans involve a lot of things like licencing, access to reliable power generation and supply and other essential utilities,” said Gordhan.

He said the process could take up to 10 months before construction commences.

“Not only will this investment address the expected future increase in cement demand in Zimbabwe, but create employment opportunities, beneficiation of the country’s mineral reserves and a significant growth opportunity for PHL’s indigenisation partners,” said Gordhan.

Although Zimbabwe’s construction sector is currently depressed due to persistent economic challenges, he said the group anticipated increase in demand to 20 million tonnes over the next five years on the back of improved economic growth.

Last November, PPC signed an indigenisation compliance deal with Zimbabwe’s government, under which the group ceded 29,6 percent shareholding to indigenous entities that include Gwanda and Umguza Community Share Ownership Trust (10 percent), Employee Share Ownership Trust (five percent), while a special purpose vehicle got 4,9 percent.

The National Indigenisation and Economic Empowerment Board (Nieeb) — created to implement the indigenisation programme — received 9,7 percent.

This comes after the firm had earlier on ceded a 21,4 percent stake to locals making it a total 51 percent as required by the Indigenisation Act.

PPC — listed on both the Johannesburg and Zimbabwe stock exchanges — has disbursed seed capital totalling $3 million to Gwanda and Umguza Community Share Ownership Trusts. - Kudzai Chawafambira

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