PPC Zimbabwe Q3 cement sales decline on reduced construction activity
REGIONAL cement producer Pretoria Portland Cement says the completion of major infrastructure projects in Zimbabwe has led to double digit declines in local sales, while exports have been hit by weakening currencies in target markets.
PPC is constructing an US$80 million cement plant in Harare, which will have capacity to produce 680,000 tonnes annually.
The company has cement manufacturing plants at Cementside in Bulawayo and Colleen Bawn in Matabeleland South.
The Harare project among others in Africa is expected to boost the demand of cement products.
“The conclusion of major infrastructure projects in Zimbabwe has led to double digit declines in local sales and cement exports have also reduced significantly on the back of exchange rate effects,” said PPC board chairman, Bheki Sibiya in a trading update for the quarter October to December 2015 released on Monday.
“PPC´s expansion remains well on track and we are pleased to advise that construction at our sites in the Democratic Republic of the Congo (DRC), Zimbabwe and Ethiopia is in line with expectations,” Sibiya added.
He said with effect from 18 December 2015, final anti-dumping duties were imposed on Portland cement originating in or imported from Pakistan. These duties, Sibiya said, would remain in place for the next five years.
He said overall cement sales volumes (including channel management) declined by 3 percent for the first trading quarter of 2016. Cement sales in the South African business declined by 1.6 percent while the international businesses recorded an 8 percent decline; including low margin cement exports to other African countries, he added.
Despite the tough South African operating environment, Sibiya said coastal regions achieved positive volume growth however this was more than offset by declines recorded in the increasingly competitive Gauteng and inland regions. For the same period, average selling prices decreased by 4 percent.
“While the South African and rest of Africa trading environment continue to face headwinds, we believe that our various response strategies have positioned PPC well to limit the impact on the group,” he added.
Going forward, PPC would continue with its focus on the Profit Improvement Programme which continues to deliver solutions for sustainable long term value creation. –The Source
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