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Cement producer PPC says its African expansion plans remain “well on track”, with commissioning of its new operation in Rwanda anticipated at the end of the year, and construction at its sites in Ethiopia and the Democratic Republic of Congo progressing well.
The Johannesburg-listed group noted in a trading update for the three months ended December 31, that additional opportunities were currently being pursued to meet its objective of generating 40% of its revenues from the rest of the continent by 2017.
Last month the company acquired a 69.3% stake in Safika Cement Holdings for R377-million, which it said had added greater impetus to its strategy of “keeping the home fires burning”.
In addition, at the end of May this year, concrete supplier Pronto Readymix would be wholly owned by PPC.
The company’s trading update came amid a South African operating environment PPC described as “tough”, limiting growth in the company’s first-quarter cement volumes and price to single digits.
“Growth in cement volumes was also achieved in Zimbabwe, with exports from the country showing a pleasing trend. Volumes in Botswana continue to be under pressure owing to weak demand and intense competitor activity,” it stated.
Similarly, sales volumes in Mozambique remained weak, owing to the competitive environment, but some increases in selling prices were achieved in these territories.
Further, the group’s lime division was beginning to show a positive trend, while the South African aggregates division had achieved “pleasing” volume growth as a result of increased offtake in road, retail and residential projects.
“While the South African trading environment will remain tough and highly competitive, we believe that our various response strategies have positioned PPC well.
“The release of major infrastructural projects in this country, as well as in Botswana and Zimbabwe, will provide a key driver for demand of cement products. Normalised earnings for the first half of 2014 are anticipated to reflect a year-on-year improvement,” the group maintained.