SA trading environment ‘tough’, says PPC
Slow economic growth and a lack of infrastructural investment, coupled with increased competitor activity and rising imports, have made the trading environment in South Africa “particularly tough”, JSE-listed cement producer PPC said in an operational update published on Monday.
In the update, which covered the period from October 2013 to July 2014, PPC noted that, to counter the low single-digit volume declines in all areas around the country, it had marginally raised selling prices.
Market volumes and prices in Botswana had also declined but the Zimbabwe market had recorded modest volume growth.
PPC pointed out that group export volumes into the rest of Africa had shown good growth, particularly out of the Western Cape into the Democratic Republic of Congo (DRC), where the company was “starting to establish a market”.
Meanwhile, the lime division’s performance had been impacted by lower offtake from the steel and alloys industries and reduced export demand, resulting in single-digit volume declines.
The aggregates divisions, both in South Africa and Botswana, had, however, achieved pleasing volume growth.
EXPANSION
The cement producer, meanwhile, highlighted that its expansion remained “well on track” with construction of its new plant in Rwanda progressing well and commission expected in early 2015.
Further, construction work continued at sites in Ethiopia and the DRC, while construction of the Harare mill had started.
In addition, detailed feasibility studies continued on an Algerian cement plant. The company had announced in February that it would buy a 49% interest in Hodna Cement, which was planning to build a $350-million cement plant in the country.
PPC continued to investigate further growth opportunities, it said on Monday.
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