Displaying items by tag: Zimbabwe

Zimbabwe: Darryll Castle, the CEO of PPC, has reassured shareholders that the construction of the group’s 0.7Mt/yr cement plant in Zimbabwe remains on schedule for completion in 2016. Castle said that the project makes sense from a cost-optimisation basis even if the volume isn’t required in the country. He made the comments at PPC’s extraordinary general meeting amid reports of rioting in the country and import restrictions on some South African goods, according to the Business Day newspaper. The project is one of four cement plants the cement producer is building in Africa outside of South Africa.

South Africa: PPC’s revenue has fallen slightly, by 1% year-on-year, to US$293m in the first six months that ended on 31 March 2016 from US$296m in the same period in 2015. The group’s operating profit fell by 3% to US$47.7m from US$49.2m. It attributed the fall in revenue to lower selling prices of cement in South Africa and falling revenues in Zimbabwe and Botswana.

By business line, PPC’s cement division in South Africa reported that its revenue fell by 5% to US$155m. It noted that cement volumes improved ‘marginally’ due to sales volume growth in the coastal regions following reduced imports and demand from infrastructure projects. However, inland provinces such as a Gauteng and the Limpopo area were negatively affected to increased competition. Outside of South Africa its cement division’s revenue rose by 6% to US$85.5m. Despite sales declines in Zimbabwe and Botswana, the group’s new 0.6Mt/yr plant in Rwanda was commissioned in the second half of 2015.
The group’s lime division also reported that its revenue in all territories fell by 12% to US$24.9m.

The group also provided an update on its on-going projects. A US$280m 1Mt/yr cement plant in the Democratic Republic of the Congo was reported 83% complete in March 2016 with ‘hot’ commissioning scheduled for late 2016. A US$85m cement mill in Harare, Zimbabwe was reported 70% complete in March 2016 with plant commissioned planned for the end of 2016. Finally, a US$170m 1.4Mt/yr cement plant in Ethiopia remains scheduled to be commissioned in the second quarter of 2017.

Zimbabwe: The Cement and Concrete Institute of Zimbabwe has presented a paper to the Ministry of Industry and Commerce suggesting government intervention in the cement industry including banning imported cement. The paper also calls for a protection tariff on imported cement of US$50/t, granting import licences to local producers, cancelling or reviewing all issued permits in circulation in the country and lowering duty on raw materials according to local press.

The country’s cement producers include Lafarge, PPC and Sino Cement. Together they have a cement production capacity of 1.85Mt/yr compared to an estimated demand of 1.17Mt/yr in 2016. Together these cement producers have invested nearly US$185m in cement plants upgrades within the last five years. However, a surplus of cement in the region means that South Africa, Mozambique, Zambia and Botswana export cement to Zimbabwe which is threatening the local producers’ investment.

Zimbabwe: Lafarge Cement Zimbabwe has reported a loss after tax of US$1.97m year-on-year in 2015. The company blamed it on a sub-optimal portfolio and price mix despite sales volumes growth. Its revenue grew by 2% to US$61.6m from US$60.5m and its cement sales volumes grew by 5%, according to the Herald newspaper.

The subsidiary of LafargeHolcim said that sales volumes were aided by its strategy of targeting distribution better supported by improvements in the local market. However, it added that sellers’ demand for discounts when buying in bulk have adversely affected cement prices. The cement producer expects prices to stay low in 2016 but it will aim for increased profits by cutting operational costs and increasing marketing.

Zimbabwe: Construction of the 0.7Mt/yr PPC Ruwa Plant in Msasa has been reported as more than half complete. PPC sources told the Financial Gazette that civil and structural construction of the cement plant is now more than 50% complete. The US$80m plant is expected to be running by the end of 2016.

Zimbabwe: Kelibone Masiyane has been appointed as the managing director of PPC Zimbabwe. He replaces Njombo Lekula, who recently became the managing director of PPC's international operations. Previous to the appointment, Masiyane’s was the general manager of the Colleen Bawn and the Bulawayo cement plants.

"Kelibone's promotion will see him assume overall responsibility for PPC Zimbabwe's business, with his key focus our Harare factory," said Lekula. Other recent promotions include those of Iain Sheasby and Karen Mhazo to the roles of Commercial Director and General Manager of Finance respectively, and that of current Group Human Resources Manager designate Trust Mabaya in March 2016.

South Africa: PPC has reported that its cement sales fell by 3% for its first trading that ran from October to December 2015. Cement sales in its South African business declined by 1.6% while its international businesses recorded an 8% decline, according to a trading update.

The South African cement producer reported that coastal regions in South Africa achieved positive volume growth. However this was offset by declines recorded in Gauteng and inland regions. During this period, average selling prices fell by 4%.

In Zimbabwe the completion of major infrastructure projects in Zimbabwe has led to declines of over 10% in local sales. Cement exports have also reduced due to exchange rate effects. In Botswana cement sales fell due to competition and weak demand. In Rwanda sales fell due to high rainfall and limited exports. However, the company's new 0.6Mt/yr cement plant was reported to be performing 'satisfactorily' and the kiln has passed its performance test for output and heat consumption.

Zimbabwe: Sino Zimbabwe Cement Company 42.5 grade Ordinary Portland cement for the construction of tall structures, bridges and roads in the first quarter of 2016.

The Gweru-based cement manufacturer, a joint venture between the Industrial Development Corporation and China Building Materials Corporation (CBMC), already has 22.5 grade masonry cement, which is recommended for masonry work, brick, mortar, plastering and general building and 32.5 grade portland composite cement, which is used for the construction of high strength structures.

Wang Yong, Managing Director of Sino Zimbabwe Cement Company, said that the company was now awaiting certification from the Standards Association of Zimbabwe (SAZ) before they could make the product available on the market. "We have already applied for the licence for us to introduce 42.5 grade cement on the market and I believe it will be issued after SAZ, which has already collected some samples, has certified the product," said Yong.

Zimbabwe: The Zimbabwe Investment Authority (ZIA) has issued Dangote Group with licences for three projects worth US$1.2bn, paving way for Aliko Dangote to start implementing business deals agreed with Government earlier in 2015. The three projects are a cement plant, a coal mining venture and an energy or power plant using coal off-take production.

Zimbabwe Investment Authority chairperson Nigel Chanakira said that construction of a cement plant would likely reduce the price of the commodity. "Without any shadow of doubt, from all indications this will be the largest plant, so it speaks to the dynamics in terms of competitive pricing in cement and the construction industry," said Chanakira. "Generally, housing building costs must come down."

He said that the ZIA wanted all licensed investors to start work immediately. "What we need now are very strong follow-ups to help anybody who has been licensed to make sure those licences are used and that they translate into real investment," said Chanakira. "In the past, we have been criticised that we approve projects and then people do not come. If you look at the trend, even in 2014, we have had the largest inflow in terms of foreign direct investment since 2006. In 2006 we had US$444m, in 2014 we reached US$545m. In 2015, the jury is still out. The year has not ended, but we are hoping that our numbers will go up to at least US$3bn."

Mozambique: Cimentos da Beira, the newest cement producer in Mozambique, plans to export some of its cement to neighbouring countries such as Zimbabwe and Malawi, in addition to supplying the domestic market, according to the Managing Director of the company, Wouter Trollip.

The plant, with an installed cement production capacity of 800,000t/yr, is expected to start operating later in October 2015, after tests of the substation that will supply electricity are complete. Trollip said that the plant already has 40,000t of clinker in stock in order to start cement production as soon as the power supply is guaranteed. With British and South African investment of US$45m, Cimentos da Beira employs 70 workers. Sofala Province now has three cement plants, including Cimentos de Moçambique and the recent Austral Ciment, an Austrian investment, both located in Dondo.