Nqobile Bhebhe, Senior Business Reporter
SOUTH Africa-headquartered cement producer, Pretoria Portland Cement (PPC), says operations in Zimbabwe continue to experience growth in cement demand supported by infrastructure spending and retail demand.
So solid is the Zimbabwe unit that for the 2023 financial year, PPC received US$8,8 million in dividends as compared to US$6,2 million realised in full year (FY) 2022.
The bi-annual dividend declarations are expected to continue and grow over time, the firm noted.
PPC is the dominant producer and supplier of cement products in Zimbabwe with operations in Gwanda, Bulawayo, and Harare where it officially commissioned a US$82 million mega-mechanised plant in the Sunway City area in 2016.
Last year the company revealed that it was reaping more dividends from this expanded capacity with more business coming from ongoing massive infrastructure projects in the country.
In a latest operational update for the 12 months ending March 2023, the cement firm said as at 30 September 2022, PPC Zimbabwe reported a decline in sales volumes of 13 percent for the first six months of the year under review due to the impact of a longer than usual kiln stoppage to implement operational and environmental performance improvements with the expectation that sales volumes would recover in the second-half of the year. However, demand for cement remained positive.
“Notwithstanding market conditions in Zimbabwe remaining positive due to continued infrastructure investments, sales volumes in H2 FY23 have been muted due to significant power interruptions and a more gradual than anticipated recovery of market share lost to imports,” said the company.
“For the full year PPC Zimbabwe, therefore, expects sales volumes to decline by 14 percent to 18 percent compared to FY22.”
The Second Republic, which came into being in November 2017, has, among other fundamentals, prioritised infrastructural development to promote economic growth and development in line with Vision 2030, where an upper-middle-income economy status is targeted.
Over the years, the Second Republic embarked on various infrastructural development projects that include Kariba South Hydropower Station expansion project, US$1,4 billion Hwange Thermal Power Expansion project, and the Lake Gwayi-Shangani investment.
The firm said its Zimbabwe unit has engaged the authorities to reduce the impact of the lack of electricity on critical industrial sectors such as cement manufacturing and to ensure a level playing field with importers.
“The outlook for PPC Zimbabwe remains positive and it is expected that EBITDA margins will continue to recover to the levels of FY22 over the coming months.
“For FY23, PPC received USD8,8 million in dividends from PPC Zimbabwe (USD6.2 million in FY22). The bi-annual dividend declarations are expected to continue and grow over time.”