HARARE – PPC, Zimbabwe’s leading cement producer, has announced a record-breaking cement production year ending in March.
The company’s robust performance in the first half of the year, driven by strong output, set new production records at its Colleen Bawn clinker plant and Harare milling plant. However, the growth pace slowed in the latter half due to a decrease in government projects and new tax measures impacting sales.
PPC operates a clinker plant in Colleen Bawn and milling plants in Bulawayo and Harare, with a combined capacity of 1.4 million tonnes annually. The Colleen Bawn plant achieved record annual production, while the Harare plant also hit its highest cement production since its commissioning in 2017.
“Record volumes were achieved in the first half of the year with a growth of 44% compared to the same period in the previous year, but growth softened in the second half, with a quarter-on-quarter volume increase dropping to 3% in the last quarter,” PPC reported. “Challenges in the second half of the year, such as lower traction from national government projects, changes in tax regulations affecting the informal market, and an influx of imports, continued into the new financial year.”
Despite achieving record production levels, PPC’s profitability was impacted by rising operational costs. The cost of electricity surged by 76%, and power cuts disrupted production schedules. Additionally, issues with railway transport increased the difficulty and expense of moving materials.
Zimbabwe experienced cement shortages early last year, prompting the government to permit imports. PPC capitalized on the low output from competitors like Khayah Cement but also faced competition from cheaper imports.
“PPC Zimbabwe experienced higher demand compared to other players, attributed to factors such as product availability, effective sales and marketing initiatives, timely deliveries, and consistent product quality. However, market dynamics shifted as the government faced pressure to allow imports, resulting in the opening of borders. This led to an influx of cheaper imports, primarily from Zambia, which undercut local prices and prompted customers to switch preferences.”
PPC reported earnings of US$36 million for the year, up from US$20 million the previous year, and delivered US$11 million in dividends. The company noted that 92% of cement sales were in USD, up from 78% the previous year.
PPC has significantly benefitted from various government infrastructure projects, including the Hwange power station expansion, Muchekeranwa Dam, Gwayi-Shangani Dam, Manyame Air Base Hospital, NUST student accommodation, RG Mugabe International Airport, the Beitbridge-Harare highway, and the Beitbridge Border Post expansion.
Source: NewZwire
