PPC Zimbabwe reclaims market share
Oliver Kazunga Senior Business Reporter
LISTED cement manufacturer, Pretoria Portland Cement (PPC) recorded a three percent increase in sales volumes for the five months to August this year compared to the same period in 2022.
In a trading update for the five months to August 31, 2023, PPC attributed its positive sales volume trajectory to “exceptionally” strong growth in Zimbabwe.
PPC Zimbabwe cement sales volumes increased 42 percent.
In January this year, the Government banned importation of cement, a development that has propped up domestic cement sales.
“Group cement sales volumes (including Zimbabwe and Rwanda) for the five months ended August 2023 were 3 percent higher than the same period last year due to exceptionally strong growth in Zimbabwe and, to a lesser extent, Rwanda, while cement volumes continued to decline in South Africa,” said PPC.
PPC Zimbabwe saw an average United States dollar selling price increase of 12 percent.
The group said the ongoing residential construction projects and the Government-funded infrastructure programmes were continuing to spur demand for cement.
The Government has identified infrastructure as one of the key economic enablers with priority being placed on infrastructural development including road rehabilitation, dam, and housing construction.
In 2023, Finance and Investment Promotion Minister Professor Mthuli Ncube indicated that the Government would continue prioritising the upgrading and rehabilitation of the country’s road network.
The Government has also placed emphasis on the completion of the ongoing works on major roads.
Priority has also been on financing the construction of dams including Gwayi-Shangani in Matabeleland North Province which is expected to be completed soon while other infrastructure development projects in the housing sector are being undertaken across the country.
“The cement market in Zimbabwe continued to show growth as a result of both residential construction and government-funded infrastructure projects.
“PPC Zimbabwe continued to win back market share during the period following the planned maintenance shutdown in the prior year.
Meanwhile, PPC received a US$3,5 million dividend in July and anticipates an additional dividend to be declared upon the publication of PPC Zimbabwe’s interim results in November
“Shareholders were previously advised that 19 percent of the 29,6 percent of PPC Zimbabwe held by various indigenisation parties vested on 5 July 2023 and PPC Zimbabwe expected to re-purchase such shares at US$ one cent each in accordance with the relevant agreements.
“The repurchase of such shares was approved at an extraordinary general meeting of PPC Zimbabwe’s shareholders on 29 August 2023 and all such shares were subsequently repurchased at US$ one cent each and cancelled,” it said.
Consequently, PPC now holds 90 percent of PPC Zimbabwe.
“Economically, PPC will receive 99,5 percent of all dividends until the notional vendor financing of the remaining indigenous shareholder is repaid.
“Once-off costs incurred by PPC in connection with the unwinding of the indigenisation transaction amounted to R42 million.”