Displaying items by tag: PPC
South Africa: PPC (formerly Pretoria Portland Cement) has announced that full-year profit in 2013 was increased by 10% after improved sales in its home market and neighbouring Zimbabwe. Net income rose to US$92m in the 12 months to September 2013 from US$83m in 2012.
"Cement sales in our home territories, particularly Zimbabwe and South Africa, have shown good growth," said Ketso Gordhan, chief executive officer of PPC.
PPC is expanding in Africa through acquisitions to offset tougher competition in its domestic market. The company will have three new plants operating in the Democratic Republic of Congo, Rwanda and Ethiopia by the end of 2015, boosting capacity by more than a third to as much as 11Mt/yr.
"Due to modest growth, the domestic trading environment remains tough and highly competitive," said a PPC representative. "We are on track to meet our strategic objective of generating 40% of our revenues from the rest of the continent by 2017."
Democratic Republic of Congo: PPC (formerly Pretoria Portland Cement) has signed a Memorandum of Understanding (MOU) with the Democratic Republic of Congo's Barnet Group to build a US$230m greenfield cement plant. The project will involve building a 1Mt/yr plant and an associated quarry 20km from Kimpese in western Democratic Republic of Congo (DRC).
"This investment is another of PPC's commitments to invest in sub-Saharan Africa and we are very confident about DRC. 22% of PPC's revenue comes from outside South Africa, at present, but the target is to increase this to 40% by our 2016 financial year. We look forward to a growing contribution and partnership with the DRC in the years ahead," said CEO of PPC, Ketso Gordhan.
In its press release announcing the project, PPC noted that the existing cement market in DRC was 'severely' undersupplied. At present, the DRC has 16kg/capita annual cement consumption, the lowest in Africa, compared with the South African average of 240kg and the global average of 400kg.
For the project PPC has partnered with Jean Saidi Bamanisa, Chairman of the Barnet Group, who is also the Honorary Secretary of the Federation of Congolese Companies. He was elected Governor of the Oriental Province of the DRC. The project will take advantage of DRC's first special economic zone.
South Africa: PPC (formerly Pretoria Portland Cement) has announced details of an agreement to buy a controlling stake in Safika Cement Holdings for US$35.3m, according to a Johannesburg Stock Exchange release.
"We are very excited to be able to add another complimentary business to PPC. This is an important step in our 'Keeping the Home Fires Burning´ strategy. The proposed transaction is subject to approval by the regulatory authorities as well as the conclusion of the due diligence process," said chief executive officer of PPC Ketso Gordhan.
Safika is a blended cement producer that owns five blending plants and one milling operation. It produces blended 32.5N cement under three brands: IDM Best Build, Castle and the Spar Build-It house brand.
In the global cement news this week, we see that PPC (the former Pretoria Portland Cement), a large-scale domestic player in the South African cement industry, has taken it upon itself to provide association-like services to cement and concrete consumers in the country. PPC says that it felt obliged to supply information on things like quantity analysis, setting advice and product testing in the place of the now-defunct Cement and Concrete Institute (CCI).
The CCI, lambasted by PPC and other cement producers for years, was accused in April 2013 by PPC of not providing the kind of advice and services that cement producers should expect from an association. PPC, Lafarge and AfriSam all pulled funding and the CCI collapsed.
If the CCI had simply ceased to exist, PPC's new stance, putting its own cash into industry-wide assistance, might be seen as laudable. However, the CCI has been re-born as the Concrete Institute (CI), an organisation that is, by its own admission, no longer on the lookout for the interests of the whole industry. The CI is largely backed by Sephaku Cement, itself majority owned by the Nigerian cement juggernaut Dangote Cement, making PPC's stance suddenly look like one of self-preservation. Dangote is making rapid progress in the sub-Saharan cement industry and firms like PPC cannot afford to let it sweep aside the status-quo in South Africa.
The speed and scale of Dangote's rise, covered previously in this column, is huge. Nigeria's largest company now has interests in Senegal, Zambia, Tanzania, Congo, Ethiopia, Cameroon, Ghana, Sierra Leone, Ivory Coast and Liberia as well as Nigeria and South Africa. Not a month goes by without the announcement of another upgrade, plant or project. Dangote has a fantastic position in its domestic market that has enabled these new projects to be funded.
By contrast PPC is battling a stale construction market in South Africa. South African cement sales fell by 3.8% year-on-year in the fourth quarter of 2012. To counteract this, PPC has committed to expand outside of South Africa to the tune of 40% of total production by the start of 2016. It announced in early 2013 that production is on track to come online in Rwanda, Ethiopia and the Democratic Republic of Congo by the fourth quarter of 2015. Zimbabwe is expected to follow suit by the middle of 2016. It already has interests in Botswana and Mozambique.
With two of its largest home-grown cement producers both expanding rapidly outside of their domestic markets, and a relative lack of interest from the big four multinationals, the sub-Saharan cement market is set for big changes in the medium to long term. PPC and Dangote are expanding towards each other and already share many markets. Dangote has expanded more rapidly and is moving towards exports from Nigeria. PPC is catching up by taking shares in strategically-placed plants. Is sub-Sahara headed for a showdown...? Whatever happens, the future of this rapidly-growing market will certainly be interesting.
South Africa: PPC (formerly Pretoria Portland Cement) launched a news and cement services 'online service desk' on 11 June 2013. The digital service follows hot on the heels of a mobile cement calculator app that can help calculate the amount of cement required for a specific job and offers real-time advice on how and when to lay concrete, based on local weather conditions.
PPC's said that it felt 'an obligation' to provide its customers (and those of the South African cement industry in general) with the information after it pulled its financial support from the Cement and Concrete Institute in April 2013. The CCI has since been dissolved. PPC had accused the CCI of being outdated and no longer able to supply the services that it, as a producer, required from an association. PPC's exit was quickly followed by AfriSam and Lafarge.
Aside from its digital services, PPC will also provide financial and technical support to universities to help develop SA's building materials and civil engineering industries. It will also expand its cement and concrete testing services, as the institute closed its testing laboratory years ago.
The CCI has since been re-established as the not-for-profit organisation the Concrete Institute (CI). It is headed by former CCI managing director Bryan Perrie, who stated that the CI is no longer representative of the whole South African industry. It is strongly linked to Sephaku Cement, which itself is majority-owned by Nigeria's dominant producer Dangote Cement.
South Africa:PPC (Pretoria Portland Cement Company) plans to build a 1Mt/yr plant costing US$200m in the Democratic Republic of Congo, according to its chief executive in an interview with Reuters. The South African cement producer aims to make at least 40% of its sales outside of South Africa by 2016.
"By the last quarter of 2015 we should begin cement production almost simultaneously in Ethiopia, Rwanda and the DRC. Zimbabwe will probably be six to nine months later," said chief executive Ketso Gordhan. He added that PPC is also looking at opportunities in Zambia, Tanzania and Malawi.
PPC reported its interim results for the half-year ending on 31 March 2013 on 16 May 2013. Profit fell by 20% year-on-year to US434.8m but total revenue rose by 8% to US$409m. Gordhan added that rising cement sales volumes for the half-year had been tempered by low sales in Botswana.
Zimbabwe/Mozambique: South African cement manufacturer PPC's (Pretoria Portland Cement) Zimbabwean subsidiary, Portland Holdings Limited (PHL), is to build a new cement plant in the country to service its markets in Zimbabwe and Mozambique. The new plant will produce about 1Mt/yr of cement and will work alongside a separate grinding facility being constructed in Tete in Mozambique.
"In recent years our investment in Zimbabwe has show strong growth on the back of a more buoyant and stable economy," said PPC's chief executive officer, Ketso Gordhan. "This, together with the fact that PPC has received an indigenisation certificate, makes us optimistic about the future of the economy and the country as a whole."
"The construction of additional cement capacity will ensure that PPC continues to be a key player in the development of infrastructure in Zimbabwe and neighbouring countries," added Gordhan. "It is totally in line with our stated strategy of growing our non-South African revenue from the current 21% to at least 40% by 2016.
"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 our indigenisation partners," said PHL's managing director, Zak Limbada.
Ethiopia: The Development Bank of Ethiopia has withdrawn from a US$82.8m loan agreement made with Habesha Cement. In September 2011 the bank approved the loan which was expected to cover over 70% of the financing of the proposed cement factory.
The bank withdrew from the arrangement on the basis of its inability to disburse money at this time. In addition, it also pulled out of the loan commitments to five other companies citing similar reasons. According to sources, the bank has pledged to help the companies in their search for foreign financing.
In July 2012 PPC (Pretoria Portland Cement) and South Africa's Industrial Development Corporation (SAIDC) paid US$21m for nearly half of Habesha Cement. PPC acquired 27% of the Ethiopian cement factory by paying US$12m in cash and the state owned SAIDC paid US$9m for an additional 20%.
South Africa: PPC (Pretoria Portland Cement), South Africa's largest cement maker, may increase production in the country by as much as 4% in 2013, according to its new chief executive Ketso Gordhan.
"South Africa is in a very tough environment at the moment," said Gordhan, who added that an oversupply of cement, partly caused by new entrants, would have an impact on the market in the first quarter of 2014. South African cement sales fell by 3.8% in the third quarter of 2012 as widespread strike action and slower economic growth sapped demand. However, PPC's sales rose by 8% in the three months to 30 September 2012.
Competitor Sephaku Holdings is expected to begin construction of a new production plant in 2013. Macquarie First South Securities analyst Peter Steyn said that PPC was, "unlikely to be unscathed" by the new arrival.
Rwanda: Rwandan President Paul Kagame laid the foundation stone for the extension of Rwanda's largest cement-producing factory, CIMERWA, on 17 January 2013. The expansion of the factory follows a deal in December 2012 that saw South Africa's largest cement firm, PPC (Pretoria Portland Cement), acquire a 51% share of CIMERWA's equity with a buyout of US$69.4m. With PPC's investment the production capacity of the factory is expected to increase from 0.1Mt/yr to 0.6Mt/yr.
"As a fast-developing nation, there is need for more and cheaper cement," said President Kagame, speaking after the laying of the foundation stone. "With the new investor in CIMERWA we expect the factory to perform much better than it did before."
Kagame said that residents of Rusizi, where CIMERWA is located, will be among the key beneficiaries of the factory's expansion through the creation of jobs. He also announced that the government will partner with the factory to put tarmac on the road leading to the factory. The government will pay 60% and the company will pay 40% of the cost of the road improvements.