PPC, the country’s biggest cement producer, has signed an agreement with Sinoma Overseas, one of the world’s largest cement engineering contractors, which could see the two build a new cement plant in Zimbabwe to meet rising demand.
PPC says the partnership will initially focus on improving efficiencies at its existing operations, but could later expand clinker production, the key ingredient in cement, and potentially add a new cement factory in Zimbabwe. The partnership will see “an assessment of the capital expenditure and investment requirements to potentially increase clinker and cement production from current levels by building a new integrated cement plant in Zimbabwe”, PPC said in a statement.
PPC Zimbabwe MD Ndima Rawana says: “Collectively, we aim to improve efficiencies and production levels at our current assets and potentially establish new clinker and cement production capacity in Zimbabwe.”
The numbers explain why PPC is betting on Zimbabwe. The market is now driving growth for PPC Africa. For the 10 months to December, group revenue rose 4%, largely supported by higher cement volumes from PPC Zimbabwe, while earnings from South Africa and Botswana were flat. In the 10 months to January, PPC Zimbabwe sold 22% more cement than the previous year, driven by “sustained strong demand across the industrial and retail sectors”.
Zimbabwe has also become a major source of cash for the group. PPC Zimbabwe delivered has US$49 million in dividends to PPC Africa over the past two years, compared to US$33 million over the previous decade.
PPC group CEO Matias Cardarelli says: “PPCZ’s cement sales and results have increased over the past two years, and we are now starting to prepare ourselves for the next growth phase.”
PPC operates plants in Bulawayo and Harare with a combined annual capacity of 1.4 million tonnes, holding more than half of Zimbabwe’s cement market. The company is also installing two solar plants with a combined capacity of 30MW to power operations previously affected by electricity shortages.
