PPC achieved record cement production in the year ending March, driven by strong output in the first half of the year. However, growth slowed in the latter half as government projects eased and new tax measures impacted sales.
The company operates a clinker plant in Colleen Bawn, and milling plants in Bulawayo and Harare, with a combined capacity of 1.4 million tonnes per year. There was record annual production at Colleen Bawn, while the Harare plant also produced its highest-ever amount of cement since it was commissioned 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 says. “Challenges in the second half of the year, such as lower traction from national government projects, changes in tax regulations affective the informal market and an influx of imports, continued into the new financial year.”
Despite record production, the company’s profits were squeezed by rising costs. Electricity prices jumped by 76%, and power cuts disrupted production. In addition, problems with the railway made it difficult and expensive to transport materials.
Zimbabwe faced cement shortages early last year, forcing the government to allow imports. PPC was able to take advantage of low output from rivals such as Khayah Cement, but the company was also hurt by the 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, the 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 earnings were US$36 million for the year, from US$20 million in the previous year. The company delivered US$11 million in dividends. Some 92% of cement sales were in USD, from 78% the previous year.
PPC has benefitted from government infrastructure projects that include; the Hwange power station expansion, the 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.
