Cement company PPC has played down social media rumours that it plans to sell its Zimbabwe unit, one of its most profitable divisions.
The company says it receives regular unsolicited offers for some of its units, but suggested it has no immediate such plans for Zimbabwe.
“PPC Ltd notes the recent social media speculation regarding the possible sale of PPC Zimbabwe. PPC regularly receives unsolicited approaches for various parts of its businesses, including PPC Zimbabwe, from a wide range of parties,” PPC said Friday, responding to queries.
“PPC’s Board has a duty to assess any such approaches on their respective merits and in line with its commitment to safeguard and enhance value for stakeholders. Any material developments on these unsolicited approaches will be shared with the market via official channels, in line with applicable regulations. PPC notes that PPC Zimbabwe forms an integral part of PPC’s Southern Africa footprint, and the business continues to focus on providing customers with high quality cement to support the development of Zimbabwe.”
PPC Zimbabwe is the largest cement producer in the country. Despite ZImdollar devaluation previously putting a dent in group accounts, Zimbabwe is one of PPC Africa’s best performers. Zimbabwe contributes 18% to group profits, while South Africa and Botswana combined account for 46%. The company has received US$15 million in dividends from Zimbabwean profits since 2020.
Last year, PPC reported that cement consumption in Zimbabwe had grown to 1.4 million tonnes per year, from below one million tonnes in 2017. PPC expects demand to rise above 1.6 million tonnes in 2023. Over 70% of PPC’s sales are now in USD, shielding it from inflation.
PPC has benefitted from an increase in government infrastructure spending. It has supplied public projects that include; the Hwange power station expansion, the completed Muchekeranwa Dam, Gwayi-Shangani Dam, the new Manyame Air Base Hospital, National University of Science and Technology (NUST) student accommodation, RG Mugabe International Airport, the Beitbridge-Harare highway and the Beitbridge Border Post expansion.
The company is investing US$40 million on a 30MW solar plant to feed its Bulawayo and Colleen Bawn plants.
Speculation of a PPC sale may have been aroused by Holcim’s sale of PPC’s smaller rival Lafarge to Fossil Mining last year.