PPC secures $75m for Zim project

HARARE - South Africa-based Pretoria Portland Cement Limited (PPC) has secured $75 million from the PTA Bank to finance the  construction of a 700 000 tonnes per annum cement mill in Harare.

PPC Zimbabwe is currently operating at 70 percent capacity, producing around one million tonnes of cement annually.

Bheki Sibiya, the group’s executive chairman, said the mill’s construction plans are “progressing well”.

“Having a modern and efficient mill in the geographic and economic heart of the country will give PPC an added competitive advantage,” he said in the group’s financial results for the year to September 2014.

Sibiya noted that the company’s Zimbabwean unit continued to enjoy a fifth consecutive year of increasing cement demand, albeit on a slower growth trajectory than in previous years.

“PPC Zimbabwe continued to realise sales volume increases ahead of local industry growth and good progress was made in increasing exports to neighbouring countries, at improved pricing,” he said.

PPC Zimbabwe, which has two operations in the country — one in Colleen Bawn and another in Bulawayo — expects to commission the new plant mid-2016.

In the period under review, the cement maker — listed on the Johannesburg and Zimbabwe stock exchanges — recorded net income of $76,4 million.

The company cut the full-year dividend by 27 percent to 1,14 rand per share.

In South Africa, PPC cement sales volumes were down two percent as economic growth slowed, cement imports increased and a five-month strike in the platinum mining industry hampered projects.

More than 70 percent of PPC sales still come from Africa’s second-biggest economy. The drop in profit “is indicating a rather challenging business environment even for cement, lime and aggregates,” Sibiya said.

Sibiya added that PPC’s rest of Africa expansion strategy was progressing well with construction underway in four countries.

He also noted that retail cement sales in Botswana were impacted by imports from South Africa at competitive prices and PPC saw a drop in sales volumes.

 

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