Displaying items by tag: Zimbabwe

Zimbabwe: Lafarge Zimbabwe is suing Gramiso Investments for an outstanding debt of over US$200,000. The cement producer and transport company entered into a prepayment agreement in which the cement manufacturing giant advanced US$500,000 to Gramiso Investments, according to the Herald newspaper. However, Gramiso Investments allegedly only paid back just over half of this amount. Lafarge Zimbabwe has taken the lawsuit to the High Court.

Zimbabwe: Edith Matekaire, the commercial director of Lafarge Zimbabwe, has blamed a backlog of foreign currency exchange as the cause of a shortage of cement. The US$2m backlog has caused plant maintenance shutdowns to take longer than they normally would, according to the Herald newspaper. Due to the lack of adequate funding, the shutdowns have been forced to take place during periods of peak production, causing effects in the market.

Despite this, Matekaire said that the local cement sector has more than enough production capacity to meet customers’ needs. Demand is 1.3Mt/yr and cement production is 2.4Mt/yr. Demand is only expected to exceed production from 2020 onwards.

Zimbabwe: Lafarge Zimbabwe says that it is able to supply the market with cement following a shortage. In a statement the subsidiary of LafargeHolcim said that the recent surge in demand was ‘temporary’ and that, overall, the situation was a ‘positive signal of economic growth,’ according to the Chronicle newspaper. It said that the situation might be attributable to a rise in mortgage finance as well as improved disposable income following a successful tobacco and maize farming season on the back of the Command Agriculture Programme.

Cement prices have reportedly risen by over 50% due to the shortage. Producers have blamed her situation on technical problems following maintenance works at their plants. They have also ruled out any further increases in prices. Despite the cement shortage they have warned against trading cement on the black market.

Zimbabwe: Lafarge and PPC are reported to be ‘scrambling’ to contain cement shortages in Zimbabwe. Capacity is down owing to maintenance and operational issues and there have been problems importing some raw materials due to a lack of foreign currency. Shortages of cement and related products have hit the country in the past week, with wholesalers, supermarkets and other retailers running out of stock.

PPC Zimbabwe’s managing director, Kelibone Masiyane, said that the ‘current cement shortage is temporary’ and Lafarge has authorisation to import up to 5000t. Some of this had reportedly come in from Mozambique over the Forbes border crossing.

Zimbabwe: Sino-Zimbabwe Cement (SZC) has been granted certification by the International Organisation for Standardisation (ISO). The company says that ISO certification will make its products attractive to compete on the international market, according to the Herald newspaper. SCZ produces three types of cement: MC 22.5 X, PC 32.5 N and 42.5N. Most of the cement is consumed by the Zimbabwean market, with a small amount exported to neighbouring countries. The company plans to produce PC 42.5R later in 2018 to target local infrastructure projects.

The cement producer’s 0.3Mt/yr Gweru plant was built in the 1990s in a joint-venture between China National Building Material Company (CNBM) and the Industrial Development Corporation of Zimbabwe.

South Africa: PPC’s profit rose due to strong performance in Zimbabwe and Rwanda. Its gross profit rose by 3% year-on-year to US$174m in the financial year that ended on 31 March 2018 from US$169m in the same period in 2017. Its revenue grew by 7% to US$762m from US$715m. However, its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 9% to US$140m from US$153m.

"Our performance has been resilient against the backdrop of challenging economic and political environments in markets in which we operate. While our rest of Africa operations, particularly Zimbabwe and Rwanda, achieved good results, our materials division faced reduced demand and increased competition. Our results have also been impacted by a number of significant abnormal items: corporate action, impairment of Democratic Republic of the Congo (DRC) operations and restructuring costs,” said chief executive officer (CEO) Johan Claassen.

By region, the group’s sales in South Africa and Botswana fell slightly due to a fall in cement sales volumes of 2 – 3%. Imports rose by 32% although PPC said it was from a low base. Elsewhere in Africa, PPC’s sales volumes rose by over 50% supported by ‘robust’ volume growth in Rwanda and Zimbabwe. The group’s PPC Barnet cement plant in Democratic Republic of Congo was commissioned in November 2017.

PPC’s lime division increased its revenue by 2% to US$59m, with volumes and selling prices similar to 2017. Volumes were constrained by key steel-customer shutdowns and non-extension of a significant contract. Lime's EBITDA contracted by
18% after higher variable costs for maintenance and raw material inputs.

South Africa: PPC estimates that local cement demand fell by 3 – 4% in 2017 due to a lack of large infrastructure projects. In an operating update for the nine months to 31 December 2017 it reported that its cement sales volumes fell by 1 – 2% year-on-year, although it had increased its prices. It increased its exports by 23%. The cement producer also reported that its Slurry Kiln 9 project was 90% complete, with commissioning scheduled for the second quarter of 2018.

Elsewhere in Africa, PPC’s sales volumes rose by 20 – 30% in Rwanda due to a rise in bulk cement sales and higher exports. In Zimbabwe sales volumes grew by 30 – 40% supported by retail sales.

Zimbabwe: PPC Zimbabwe has hinted that it may be looking to shut down its Colleen Bawn Cement plant in Gwanda, citing pressure from cheaper imported clinker as well as smuggled cement coming over the border. If it decides to close the plant, the move would represent a significant blow for PPC Zimbabwe and PPC’s wider activities outside of its native South Africa.

The management has appealed to the government for protection, stating that, unless measures are put in place to curb cheap imports, the firm risks losing its investment at Colleen Bawn. It estimates that a wider community of around 4000 rely indirectly on the plant for their livelihoods. The plant has been in operation for more than 70 years.

Country managing director Mr Kelibone Masiyane said, “The cost of production is very high in Zimbabwe when compared to the rest of the region. Our competitors are importing clinker at cheaper cost and they are jumping the production process. The biggest challenge here at Colleen Bawn is that we incur huge costs producing clinker and because of this there is a risk of closure of the plant and opting to import clinker as well.”

However, Masiyane expressed confidence that the engagements PPC Zimbabwe was having with the government would result in ‘fruitful’ interventions that would protect the firm and avert negative effects. He said that the company’s major cost driver was electricity costs, which are much higher than in neighbouring countries.

In response Deputy Minister Mabuwa said that the government appreciated the strategic economic role of the cement manufacturing sector and would address the plight of PPC. She concurred that, while cement was removed from the open general import license, continued clinker imports were having a negative effect on the value chain.

South Africa: PPC estimates that cement demand improved in South Africa during the first half of 2017 following a poor first quarter to the calendar year. It has also predicted that production capacity utilisation rates for the industry as a whole are growing and that they could reach full capacity in 2020. On an adjusted like-for-like basis its cement sales volumes grew by 0.5% year-on-year in the most recent quarter due to good performance in its Coastal and Inland areas. However, imports have continued to decline, by 27%. Outside of South Africa the company has overseen growth particularly in Rwanda, and, in Zimbabwe, the Democratic Republic of Congo and in Ethiopia as well. The company made the announcement as part of an operational update for its first financial quarter that ended on 30 June 2017.

”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 DRC and Ethiopia, ensuring that they deliver to expectations, while further optimising efficiency in our other businesses,” said interim chief executive officer (CEO) Johan Claassen.

Zimbabwe: China’s Livetouch Investments has started production at its 0.4Mt/yr cement grinding plant at Redcliff. Managing director and co-shareholder Dongning Wang said that the US$30m plant had started operation at 70% of its capacity, according to the Herald Business newspaper. The plant is expected to employ 200 workers once it is fully operational. The company markets its cement under the Diamond Masonry brand.

Although some work remains on the first phase of the project the second phase will see the construction of a clinker producing plant at the same site. The company is negotiating at present with the Ministry of Mines and Mining Development for access to limestone deposits. Work on the second phase is expected to start six to nine months after the mineral rights are secured.