PPC has announced plans to construct a 1Mta cement factory in the Democratic Republic of Congo, as part of the company’s plans to increase revenue streams outside South Africa to 40 per cent by 2016.
The company is expanding in Africa through acquisitions to offset tougher competition in its domestic market and plans an investment of plans an investment of US$200m in the central African country.
The move follows acquistions made last year in cement producers in Ethiopia and Rwanda. In July it purchased a 27 per cent stake in Habesa Cement Share Company of Ethiopia for US$12m which is in the early stages of construction and scheduled to start operations in 2015. In late 2012, PPC then moved into Rwanda through the acquisition of a 51 per cent stake in the country’s sole cement producer Cimerwa for US$69.4m. The plant currently has a capacity of 100,000tpa which PPC is looking to increase to 600,000tpa.
The company plans to tap the capital market for a further ZAR650m (US$69.5m) after an initial auction of about the same amount in March, according to CEO Ketso Gordhan. It is also looking at opportunities in Zambia, Tanzania and Malawi, according to reports by Reuters, although no plans have been confirmed.
PPC also said that first half profit fell 20 per cent as a result of tax charges and costs associated with complying with Zimbabwe’s ownership laws. Net income for the six months through March declined to ZAR295m (US$31.9m) compared with ZAR369m. Sales increased eight per cent to ZAR3.81bn from ZAR3.53m. Full-year earnings for the current fiscal are expected to be similar to last year, according to Gordhan.
