JSE-listed PPC’s Zimbabwean subsidiary Portland Holdings on Thursday announced it would build a new one-million-ton-a-year cement plant.

At its centenary celebration, in Harare, the cement producer said the new plant would service the Harare and central Mozambique markets.

“A benchmark cost figure for a greenfield cement plant in Africa is around $250/t of yearly capacity, which would translate into a cost of $250-million for the proposed plant,” PPC corporate strategy and communications executive Kevin Odendaal told Engineering News Online.

While funding had not yet been finalised, PPC said this would most likely come from a combination of debt raised on the company’s balance sheet and project financing.

“We still have headroom on our balance sheet to raise funds. Our current debt to earnings before interest, tax, depreciation and amortisation ratio is 1.5 and we are comfortable with a ration of up to 2.5,” Odendaal noted.

The establishment of the plant would coincide with the construction of a separate grinding facility in the neighbouring territory of Tete, in Mozambique.

The preliminary study for the cement plant in the Mashonaland province was at an advanced stage, with significant investment already having been made in exploration drilling at various locations.

The company would now start a full-scale feasibility study, including the selection of an equipment supplier.

PPC CEO Ketso Gordhan said that the company’s investment in Zimbabwe had shown strong growth on the back of a more buoyant and stable economy.

“This, coupled with the fact that PPC has received an indigenisation certificate, makes us optimistic about the future of the economy and the country as a whole.”

He added that the construction of additional cement capacity would ensure that PPC continued to remain a key player in the development of infrastructure in Zimbabwe and neighbouring countries.

“It is in line with our stated strategy of growing our non-South African revenue from the current 21% to at least 40% by 2016,” said Gordhan.

Portland Holdings MD Zak Limbada added that the investment would address the expected future increase in cement demand in Zimbabwe.