PPC seeks more Africa projects to boost cement capacity by 75%

PPC, South Africa’s largest cement maker, plans to boost production capacity by as much as 75% as it targets more projects across the continent.

“The pipeline for at least one or two more projects is very healthy at the moment,” chief executive Ketso Gordhan said in a phone interview from Johannesburg on Tuesday. “By the end of 2017, we should be a 14-million-tonne player.”

The company is expanding with new plants across Africa at a cost of $1.04-billion to meet demand in countries that are net importers of cement. Johannesburg-based PPC has started four projects in Rwanda, Democratic Republic of Congo, Zimbabwe and Ethiopia, with a fifth planned.

PPC is targeting 40% of sales outside South Africa by 2017, compared with 26% in the six months through March. The domestic market is oversupplied by about 3-million tonnes, according to Gordhan. New operators including Dangote Cement are competing with PPC while demand remains sluggish due to weak economic growth.

“We have capacity and the ability to do one more project,” he said. “We are pursuing a number of opportunities” with production of as much as two million tonnes.

PPC’s current capacity is about eight million tonnes, according to the company’s website. Current expansion projects will increase that to 11-million tonnes by 2015.

Algeria venture
A new plant in Algeria is set to start operating by early 2017 after investments of $400-million to $450-million. 

Hodna Cement Co., in which PPC is acquiring a 49% stake, will produce two million tonnes of the construction material a year.

PPC fell as much as 5.3%, the steepest intraday drop since Jan 17, and was trading down 4.7% at R31.41 as of 11.39am  in Johannesburg on Tuesday. That wiped out the stock’s gain this year, in contrast to a 7.5% increase in the 166-company FTSE/JSE Africa All-Shares Index.

Fiscal first-half normalised headline earnings, which excludes some one-time costs, rose 3.6% from a year earlier to R0.86, PPC said in a statement on Tuesday. Sales increased 9% to R4.16-billion.

“We are little bit disappointed” by the results, as a strike in the platinum sector and three weeks of rain contributed to a 2% decline in sales in South Africa, Gordhan said. For the second half ending in September, PPC expects better performance as demand picked up in April and May. – Bloomberg

PW Botha wagged his finger and banned us in 1988 but we stood firm. We built a reputation for fearless journalism, then, and now. Through these last 35 years, the Mail & Guardian has always been on the right side of history.

These days, we are on the trail of the merry band of corporates and politicians robbing South Africa of its own potential.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.


The rule of law in times of crisis: Covid-19 and...

Under a state of national disaster, some rights may be suspended. But it is critical to remember that the Constitution itself is not suspended

Test backlog skews SA’s corona stats

With thousands of samples still waiting to be processed, labs are racing to ramp up testing to help the government gain a better idea of how prevalent Covid-19 really is

Press Releases

The online value of executive education in a Covid-19 world

Executive education courses further develop the skills of leaders in the workplace

Sisa Ntshona urges everyone to stay home, and consider travelling later

Sisa Ntshona has urged everyone to limit their movements in line with government’s request

SAB Zenzele’s special AGM postponed until further notice

An arrangement has been announced for shareholders and retailers to receive a 77.5% cash payout

20th Edition of the National Teaching Awards

Teachers are seldom recognised but they are indispensable to the country's education system

Awards affirm the vital work that teachers do

Government is committed to empowering South Africa’s teachers with skills, knowledge and techniques for a changing world

SAB Zenzele special AGM rescheduled to March 25 2020

New voting arrangements are being made to safeguard the health of shareholders

Dimension Data launches Saturday School in PE

The Gauteng Saturday School has produced a number of success stories