PPC banks on Zimbabwe polls

PPC banks on Zimbabwe polls
Published: 22 June 2018
SOUTH African cement producer PPC says Zimbabwe's political landscape has improved with the cement maker eyeing positive growth after the July 30 general elections.

This week PPC group chief financial officer Tryphosa Ramano said PPC – which recorded seven percent revenue of R10,27 billion, up from R9,64 billion, impacted by the strengthening of average rand exchange rates against most foreign currencies increase in the year to March 31, 2018 – was optimistic of Zimbabwe's growth prospects.

"The political landscape is improving in Zimbabwe, with elections scheduled for July 2018. PPC Zimbabwe is well positioned to benefit from improved growth prospects," the PPC boss said.

PPC Zimbabwe's revenue in the year under review grew 34 percent as volumes increased by more than 45 percent.

Zimbabwe is the biggest contributor to group revenue and earnings before interest, tax, amortisation and depreciation (EBITDA) after southern Africa, which includes South Africa and Botswana.

According to Ramano, the group's market share in Zimbabwe has grown to 65 percent from 56 percent.

"We put a plant in Harare, as we never had operations there before," Ramano said.

This comes as the listed cement producer's local managing director Kelibone Masiyane recently told The Financial Gazette that the group - which recently announced it will leverage on an enhanced export incentive which the cement producer has been granted by the Reserve Bank of Zimbabwe to break even and resume exports despite high production costs – anticipated a cement demand boom in the future.

Masiyane said the group was eyeing increased production from its 1,4 million tonnes per annum as it anticipates increased market demand on the back of government's initiatives to court foreign investors.

"We are saying we need to start sweating this asset first. Msasa is exactly the same as Bulawayo, 700 tonnes a year each, so currently we talk of 1,4 million tonnes, that is what PPC alone can supply into the Zimbabwean market.

"When we invested in Masasa, people were surprised, but we had foreseen the situation in the country would improve so we are poised for that and are now working towards locking as much share in the local market," he said then.

The PPC boss was also quick to point out that the firm was not looking at major capital investments – following its $800 million Msasa plant – as focus was on maximising present capacity to the full.

In the year under review, PPC group core profit, or EBITDA, fell nine percent to 1,9 billion rand ($139 million) due to costs such as the ramp-up of the Congo plant and restructuring costs.

- fingaz
Tags: PPC,


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