PPC Zimbabwe to resume exports

PPC Zimbabwe says it will leverage on an enhanced export incentive which the cement producer has been granted by the Reserve Bank of Zimbabwe (RBZ) to break even and resume exports despite high production costs, according to The Zimbabwe Independent.

The central bank has approved the company’s application for an export incentive above the usual five per cent.

PPC Managing Director Kelibone Masiyane said that the company’s export levels have dropped from 0.1Mta in 2014-15 to zero as currencies continue to depreciate against the strong US dollar in use in Zimbabwe.

He said the company was now going into the export market at variable costs but will not recover its fully absorbed costs, with the bottom line being to get US dollars to be able to pay for raw materials. This will include stripping out local costs and focussing on the US dollar component.

“RBZ has heeded our call to increase the export incentive. It gives that capability and it helps in a way. Cost of production is too high to break into the export market. To compete is very difficult and again you recall in 2009 when we dollarised, all currencies depreciated gains to the US dollar.
“So, without us doing anything or improving on pricing we just became so uncompetitive. So what we are doing right now, we are going to go in there even at a variable cost so we are not going to recover our fully absorbed costs,” he said.

Mr Masiyane does not see the Harare grinding unit reaching full capacity utilisation in the next 18 months, despite the recent increase to 60 per cent.