PPC - February 2019

Subdued construction activity in South Africa is being blamed for a fall in sales by PPC in the nine months to December 2018. The company posted a decline in cement volumes of 2-3 per cent YoY over the nine-month period, while the South African market is believed to have contracted by as much as five per cent. PPC is currently campaigning for tariffs to curb the volume of cement imports into the country, which jumped by up to 80 per cent between January to November last year. According to the company, imports into Cape Town grew by 48 per cent, while imports into Durban advanced by up to 84 per cent. In total last year, 927,809t of cement were imported into South Africa, mainly from Vietnam, China and Pakistan, compared to 425,144t in 2017.

Outside South Africa, PPC’s operations in Rwanda and Ethiopia have seen good growth. However, the news is less encouraging in the Democratic Republic of Congo and Zimbabwe, the latter of which has seen a number of operational issues causing lower growth in volumes. Price hikes in Zimbabwe are putting further strain on the producer as the government recently imposed a 150 per cent increase in fuel prices. The company responded by saying it would have to increase exports and implement a number of cost-cutting measures to help keep its EBITDA margins on track.