Displaying items by tag: Zimbabwe
Cash crunch hinders Lafarge Zimbabwe
05 October 2016Zimbabwe: Lafarge Zimbabwe has blamed cash shortages for mounting losses. The company reported that it made a loss of US$2.2m in the first six months of 2016, up from a loss of US$1.3m in the same period of 2015. Its sales revenue grew slightly to US$26.5m from US$25.4, according to the New Zimbabwe newspaper. The cement producer has blamed the loss on cash shortages in the country and competition from imports.
“The volumes of cement sales remained subdued due to increased competitive activity in the total market following the influx of cement imports into the country as well as the entry of a major competitor into the Harare market,” said chairman Kumbirayi Katsande. He added that import restrictions would be helpful but that they would not solve major structural problems with the local economy.
Cash shortages are causing delays in paying foreign creditors said Katsanda. The country is preparing to introduce bond notes, a new local currency, to ease the problem, in November 2016.
Sino Zimbabwe Cement may cut shifts in response to poor demand
09 September 2016Zimbabwe: Sino Zimbabwe Cement Company may cut shifts in response to poor local demand for cement. Managing director Wang Yong told the Business Chronicle that local demand for cement has fallen by 25% due to a poor construction market. The cement producer is considering reducing its current pattern of three shifts to just one day shift.
Despite market concerns, the company has spent US$1m towards building storage space for raw materials and transport infrastructure improvements. In 2015 it completed a US$5m upgrade to double its production capacity to 0.4Mt/yr.
Zimbabwe: Chinese cement producer Mortal Investments Manufacturing Company is constructing a US$10 million plant in Redcliff with capacity to employ about 400 employees, while producing 1Mt/yr. Its arrival in Zimbabwe is expected to intensify competition in the market dominated by Lafarge Cement and Pretoria Portland Cement (PPC). It will be the second cement producer to invest in the Midlands Province, after Sino Zimbabwe Cement, which is located just outside Gweru.
For a town battling high unemployment levels following the closure of its major source of jobs - the Zimbabwe Iron and Steel Company (ZISCO) - the new project will add life to the town. Redcliff is strategically located for cement producers given its proximity to significant quantities of slag from ZISCO. Redcliff mayor, Freddy Kapuya, said the investment has brought hope to the town. "This will have a positive impact on the lives of the people in Redcliff. The Chinese company bought about 100,000m2 of land from us for about US$600,000 and they have since started constructing a cement plant after investing about US$10 million," he said.
Gift Mpofu, the past president of the Construction Industry Federation of Zimbabwe, welcomed the development, adding that the industry was looking forward to a better product. "As long as they don't produce a dubious or shoddy product, we will support them. This also means that cement manufacturing players will now compete in terms of prices," Mpofu said.
Mortal's interest in Zimbabwe comes a year after Nigerian billionaire; Aliko Dangote announced that Dangote Cement would set up a US$400 million plant in the country, as part of its Pan African expansion strategy. Dangote has already established an operation in Zambia, and his entry into Zimbabwe demonstrates that despite depressed demand, foreign investors are seeing a bright future in the country.
The entry of Mortal and Dangote in the cement industry has resulted in existing players taking steps to cement their dominance in their niche markets. PPC, the largest cement manufacturing company in Zimbabwe, has been working on expansion programmes, with a new plant expected in Harare to serve markets that include Mozambique.
The Zimbabwe unit of LafargeHolcim, is also increasing capacity. Lafarge, the second largest cement producer in the country, says it would continue to make innovations and introduce new products that meet customer needs. Lafarge has introduced a range of new packaging brands for its products.
Sino Zimbabwe has also invested US$2m to boost production at its plant near Gweru.
Zimbabwe: Chinese cement producer Mortal Investments Manufacturing Company is building a US$10m grinding plant in Redcliff, Midlands province with a production capacity of 1Mt/yr. It is the second cement project in the province following the Sino Zimbabwe Cement plant near Gweru, according to the Financial Gazette newspaper. 400 jobs will be created at the site. The plant is also expected to benefit from slag from the nearby Zimbabwe Iron and Steel Company (ZISCO) steel plant at Kwekwe.
Zimbabwe PPC cement plant to be completed in 2016
02 August 2016Zimbabwe: 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.
Lafarge Zimbabwe posts US$1.97m loss in 2015
25 April 2016Zimbabwe: 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.
Construction of PPC Ruwa Plant making progress
15 April 2016Zimbabwe: 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.
Kelibone Masiyane appointed managing director of PPC Zimbabwe
24 February 2016Zimbabwe: 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.