PPC Southern Africa MD Njombo Lekula says it is largely owing to strong relationships with its people that the company has managed to not only pull through Covid-19, but also been able to continue with its restructuring and refinancing project.
Lekula says the company’s social impact has always been at the forefront of its sustainability strategy and that its focus on people has helped the company to achieve 128 years of existence.
In particular, he points out that PPC’s environmental, social and governance aspects focus on social fibre, the environment and a purpose to empower people to experience a better quality of life.
“Our corporate social responsibility programmes are centred around health, education and infrastructure. Covid-19 had led us to naturally accelerate our approach to health,” Lekula highlights, adding that PPC has, in most of its operating jurisdictions, existing social centres that started supplying personal protective equipment to communities.
Additionally, PPC had donated mobile clinics in the areas of Tshwane and Johannesburg, which had since been converted and capacitated to cater to Covid-19 screening, testing and information-sharing.
PPC also took care to meet its contractual obligations with small, medium-sized and microenterprises, in particular, despite cash flow restraints amid the pandemic.
Meanwhile, Lekula explains that, just as Covid-19 is dangerous to people with comorbidities, so too is the South African economy more exposed to suffering owing to the "comorbidities” of our ailing economy prior to Covid-19 – including government’s low investment into public infrastructure in recent years – which exacerbates difficulties for the cement manufacturer.
What will help, is government designating cement as a product that should be procured locally for public infrastructure projects. Imports continue to enter the market.
Responding to why cement has now been designated for local procurement, Lekula says that government recognises the importance of protecting and supporting local industries, while keeping up healthy trade relations with other countries as per World Trade Organisaion agreements.
However, Lekula believes Covid-19 has highlighted the importance of self-sustaining economies and local manufacturing.
Lekula believes that Covid-19 has had some positive outcomes too, such as business and government working closer on certain matters and government starting to realise the importance of helping businesses, in order for them to help the economy and preserve jobs.
The biggest lesson for PPC coming out of the hard lockdown for Covid-19, Lekula states, is the value of partnerships – from suppliers to customers and government. “Our existence is just as important as their existence,” he avers.
The company aims to implement a sustainable capital structure and improve the investment prospects of the company, through its restructuring and refinance project, which has included revising terms with its South African and Democratic Republic of Congo lenders.
After a difficult start to PPC’s 2021 financial year from April last year, owing to Covid-19-related trade restrictions imposed by authorities in most of the jurisdictions in which it operates, the company had started experiencing a strong recovery in cement sales that had contributed to improved operating performance.
The company’s sales volumes started recovering in South Africa and Botswana in June last year, with double-digit year-on-year growth recorded since then.
In the three months ended September 30, cement sales volumes increased by between 20% and 25% year-on-year.
The sales volumes in October grew by between 15% and 20%, compared with October last year.
PPC, at the time, said the increased volumes were primarily retail-led, as consumers had more disposable income as a result of reduced discretionary spending on other items when movement was restricted during lockdown, as well as extra income as a result of reduced interest rates and various social relief grants.
The company also started experiencing the positive impact of increased infrastructure spending, which it hopes will carry the strong demand once retail sales volumes normalise.
Lekula is optimistic about government’s infrastructure development plans, noting that steel, cement and electricity are the three key assets needed to kickstart an economy.
He believes South Africa, and Africa for that matter, has the resources and capacity for a sustainable recovery post Covid-19.