http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.01Change: 0.00
R/$ = 10.67Change: -0.04
Au 1287.51 $/ozChange: 0.01
Pt 1424.50 $/ozChange: -1.50
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Nov 08, 2011

PPC aims to generate half of its revenue from rest of Africa by 2016

Back
Engineering|Gauteng|Port|Africa|Aggregates|Cement|Cogeneration|Costs|Diesel|Pretoria Portland Cement|PROJECT|Pronto Holdings|Quarries Of Botswana|Readymix|Renewable Energy|Renewable-Energy|Road|Africa|Botswana|Democratic Republic Of Congo|South Africa|USD|Colleen Bawn Factory|Port Elizabeth Factory|Port Elizabeth Plant|Cement Industry|Cement Market|Cement Player|Cement Producer|Cogeneration|Electricity|Energy|Equipment|Fly Ash Supplier|Government-owned Cement Producer|Logistics|Transport|Cogeneration|Paul Stuiver|Power|Rail|Rail Transport|Diesel
Engineering|Port|Africa|Aggregates|Cement|Cogeneration|Diesel|PROJECT|Readymix|Renewable Energy|Renewable-Energy|Road|Africa|Democratic Republic Of Congo||||Cogeneration|Energy|Equipment|Logistics|Transport|Cogeneration|Power|Rail||
engineering|gauteng|port|africa-company|aggregates|cement-company|cogeneration|costs|diesel-company|pretoria-portland-cement|project|pronto-holdings|quarries-of-botswana|readymix|renewable-energy|renewable-energy-company|road|africa|botswana|democratic-republic-of-congo|south-africa|usd|colleen-bawn-factory|port-elizabeth-factory|port-elizabeth-plant|cement-industry|cement-market|cement-player|cement-producer|cogeneration-industry-term|electricity|energy|equipment|fly-ash-supplier|government-owned-cement-producer|logistics|transport-industry-term|cogeneration-person|paul-stuiver|power|rail|rail-transport-product|diesel
© Reuse this



Cement producer Pretoria Portland Cement (PPC) plans to boost the revenue contribution from its African business, outside South Africa, to 50% in the next five years, CEO Paul Stuiver said on Tuesday.

The company increased its revenue contribution from the rest of the continent to 20% in the past financial year, which Stuiver said was in line with PPC’s strategic growth objectives, with Africa being “the growth story of the moment”.

“We would like our earnings from Africa to increase to between 40% and 50% in the next five years. We understand Africa better than most other players; it is on our doorstep and we believe it is an opportunity begging, especially for a cement player finding it difficult to grow in its home territory,” he told Engineering News Online.

The group looked at eight significant expansion opportunities into other African regions during the financial year ended September 30, four of which were abandoned due to either a lack of potential for value creation, unacceptable levels of risk or a combination of both.

Of the remaining four, one project has resulted in a $44-million conditional offer for a 58% stake in a government-owned cement producer in the Democratic Republic of Congo, Cimenterie Nationale. “We await the outcome of our bid. The remaining opportunities are being pursued and we expect that further opportunities will arise in due course,” Stuiver said.

In Botswana, PPC recently bought Quarries of Botswana for $6.8-million, which it said would benefit its aggregates operations in that country, and in South Africa, the group is buying Gauteng-based readymix and fly ash supplier Pronto Holdings for R280-million.

Stuiver said PPC was optimistic about the Zimbabwean cement market. Domestic sales in that country improved by more than half during the year,owing to a combination of increased demand and operational problems suffered by PPC’s competitors. The operating performance at the Colleen Bawn factory improved during the second half of the year and equipment at its Bulawayo grinding depot, that had been mothballed for 15 years, was recommissioned to meet increased demand.

However, Stuiver pointed out that significant input price inflation on key items such as electricity, continued to be a concern for the Zimbabwean operations.

While growth remained slow in South Africa, Stuiver stated that the group was confident in the long-term recovery of the domestic cement industry. “We have seen the worst. The cyclic trend is coming up again, after hitting the bottom in 2010.”

Stuiver cautioned, however, that the eurozone crisis could result in another general slowdown in business.

PPC said that overcapacity in the South African cement industry continued to drive competitive market conditions and was putting prices under pressure. “A weighted average increase of 4% in selling prices during the year was insufficient to recover rising input costs,” he said.

Costs rose 11% in the financial year on the back of above-inflation electricity prices and diesel price increases, accompanied by higher logistics costs as inadequate rail transport had to be supplemented by more expensive road transport.

PPC’s cement volumes in South Africa fell by 4% in the financial year ended September, while overall cement sales were 3% lower.

The group’s revenue was almost flat at R6.83-billion, compared with R6.81-billion in the previous financial year. Earnings a share declined by 22% to R16.40 a share.

PPC reduced headcount by 6%, or 180 people, over the past financial year, with 35 employees from head office and 45 employees from its Port Elizabeth plant taking voluntary retirement packages. Stuiver said this was necessary to align the Port Elizabeth factory to production capacity.

PPC also slowed its capital investment programme in line with depressed trading conditions. Capital investment of R483-million was incurred, compared with R613-million in the previous financial year.

ENERGY

Meanwhile, Stuiver said that PPC has completed a feasibility study into a cogeneration facility at one of its plants, but concluded that it would not be worth its while.

“The capital cost of setting electricity cogeneration units at our plants, versus the energy costs we would save does not make it worthwhile. We would rather take the capital and put it towards a cement plant,” he said.

However, the company was investigating a wind power joint venture. “We have an exciting prospect and would like to tender in the next round of government’s renewable-energy procurement scheme in March 2012,” he said.

PPC is aiming to generate about 30 MW, or 10% of its total energy needs.
 

Edited by: Mariaan Webb
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Construction Materials News
There is little opportunity for JSE-listed infrastructure company Group Five to grow shareholder value in the domestic market, says CEO Mike Upton. He says value can still be found in the private sector, in the renewable and industrial power sector, as well as in...
Murray & Roberts (M&R) has closed the book on its three-year recovery and growth phase and has now turned its focus to a longer-term “new strategic future” of “engineering excellence”. The past three years have seen the international engineering-led...
Kobus Verster
An underperforming Grinaker-LTA and problem projects in Australia in the past financial year continued to take their toll on construction and engineering group Aveng. The JSE-listed company on Tuesday reported its financial results for the year ended June 30, with...
Article contains comments
More
 
 
Latest News
The pump prices of both grades of petrol and wholesale diesel, as well as the maximum retail prices of illuminating paraffin and liquefied petroleum gas (LPG), are set to decrease from September 3, the Department of Energy said on Friday. Petrol would drop by 67c/l,...
The amount owed to municipalities for services has continued to rise, reaching R94-billion by June, compared with the R93.3-billion recorded in December. Households still accounted for the bulk of the aggregate municipal consumer debts; however, this had declined...
More
 
 
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
 
 
 
 
 
This Week's Magazine
South African State-owned defence industrial group Denel has announced its fourth consecutive year of profits. The group's results for the financial year 2013/2014 were recently announced at its head office in Centurion, south of Pretoria. Revenues grew by 17%, net...
There is little opportunity for JSE-listed infrastructure company Group Five to grow shareholder value in the domestic market, says CEO Mike Upton. He says value can still be found in the private sector, in the renewable and industrial power sector, as well as in...
The National Association of Automobile Manufacturers of South Africa (Naamsa) has announced the event dates of the 2015 Johannesburg International Motor Show (JIMS). The event will take place from October 14 to October 25, 2015, at the Johannesburg Expo Centre, Nasrec.
UK engineering support services provider Babcock is set to deliver the largest order of global truck manufacturer DAF’s truck tractors in Southern Africa to bulk carrier road-based logistics company Ngululu Bulk Carriers (NBC), with 133 trucks to be delivered in...
Digital radio communications in the African local government space can open up the world, but have many challenges to overcome, notes integration and migration of legacy radio communications infrastructure with digital mobile radio company Emcom Wireless head of...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks