PPC in record production

PP

Published: 28 August 2017

Cement manufacturer PPC has recorded the highest production volumes in Zimbabwe for the first time in 18 years following the opening of a new $82 million plant in Harare.

The group's interim chief executive, Johan Claassen, said Zimbabwe operations continue to exceed expectations, with the investment in the Harare mill - with capacity to produce over 1,8 million tonnes of cement per year - contributing to volume growth.

"PPC Zimbabwe also saw double digit volume growth compared with last year, and in June 2017 recorded the highest monthly volumes since June 1999," he said in the cement maker's quarterly market update.

Claassen noted that pricing in United States dollars in the quarter to June was flat compared with the previous corresponding period.

"The country continues to experience liquidity constraints," he added.

Commenting on the group's performance on the African continent, Claassen said the group's revenue was way ahead of the previous comparative period ended June 30, 2016.

"Our focus is firmly on delivering improved profitability and liquidity in the shorter term while our longer term strategy remains unchanged. More specifically, we will focus our management effort on the new operations in the Democratic Republic of Congo (DRC) and Ethiopia, ensuring that they deliver

to expectations, while further optimising efficiency in our other businesses," he said.

Claassen noted that the regional cement manufacturer was committed to unlocking long-term sustainable shareholder value.

PPC experienced an upsurge in cement demand in South Africa during the first half of calendar 2017 after a dampened first quarter of 2017.

The cement sales volumes in South Africa declined marginally when compared to the same period in the previous year, which, however, had two less trading days.

"On a like-for-like basis, volumes were up 0,5 percent driven by solid performances in both the coastal and inland areas. Imports have declined by 27 percent compared with the same period last year," the interim chief executive said.

In the rest of Africa, cement volumes have seen double digit growth compared to the prior period with segment revenue and earnings before interest, tax, depreciation and amortisation are growing ahead of last year.

The group delivered robust volume growth in Rwanda, with its capacity utilisation now reaching 60 percent.

Monthly volumes had realised their highest level since commissioning two years ago.

In the DRC, monthly sales had tracked progressively better.

"We have doubled our sales volumes in each successive month despite a muted trading environment," Claassen said.

But imports from Angola had reduced significantly as competition from local producers has increased.

In Ethiopia, cement production only started in June 2017, but more than 100 000 tonnes of cement had been pre-sold since February due to high demand.
- dailynews

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