JSE-listed cement producer PPC in this fiscal year would import about one-half of the 400 000 t of the building material it imported in the previous one, and it was "unlikely" that it would be importing any cement into South Africa in the 2009 financial year, its chief said on Wednesday.

This was as growth in residential demand slipped, and the producer was "squeezing more production" out of its operations, CEO John Gomersall stated.

Meanwhile, of the "couple of hundred thousand tons" PPC was expecting to import during the 2008 financial year, in excess of 100 000 t would be going to neighbouring Mozambique, he said.

The company was also anticipating that its Batsweledi expansion would come on line by end-June, which would lift its production for 2008 by a maximum of 400 000 t - which was approximately the same amount of cement that PPC imported in the 2007 calendar year.

This was, however, significantly short of the 700 000 t that the firm advised in October last year.

Gomersall said that PPC imported 50 000 t less in the six months to March than in the same period the previous year.

Last year, all South Africa's biggest producers said that they had to import cement to keep pace with demand.

SLOWDOWN

Gomersall said that while the PPC was seeing slower growth in cement demand this year and the next, mainly owing to soaring interest rates biting the residential building sector, the company was standing by its long-term growth forecasts.

Demand slowed by 1,3% in the first half of this financial year, compared with the same period in 2007.

Speaking in a telephone interview, he said that demand growth of between 2% to 4% might continue until the first half of the 2009 fiscal year, but that housing demand would then begin to pick up, as "people gradually get their financial acts together".

Upward marching interest rates and increasing inflation, coupled with high debt levels, had whacked South African consumers' pockets, leading to a deceleration in the housing market.

But Gomersall asserted that cement's fundamentals were strong, as government was continuing full-steam ahead with its R500-billion-plus infrastructure spend over the medium term.

He pointed out that infrastructure projects including the Medupi power station near Lephalale, development at the OR Tambo International Airport and the Cape Town International Airport, all bode well for cement demand in the near future.

Further, the Gauteng provincial government was in the process of closing contracts worth from R10-billion to R12-billion, which had to be completed before 2010, Gomersall said.

PPC also on Wednesday posted a net profit for the six months ended March 31 of R674-million, which was a 15% increase over the same period the previous year.

Headline earnings showed a 16% rise to R1,26 a share, after the group grew its revenue by 13% to R2,9-billion.

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