PPC, Africa’s biggest cement company, says cement sales in Zimbabwe grew 25% year-on-year up to March, on better-than-expected demand from individual buyers and government projects.
Cement sales are expected to come in 36% better than pre-pandemic levels, PPC said in an update Wednesday.
“PPC Zimbabwe continues to trade well and ahead of expectations. For the twelve months ending 31 March 2022, PPC Zimbabwe’s cement sales volumes are expected to increase by 21%-25% year-on-year, benefiting from retail demand, increased sales to concrete product manufacturers, and support from Government-funded projects,” PPC reported in a trading update. “Relative to the comparable period ended 31 March 2020 (Pre-COVID-19), cement sales volumes are expected to increase by 33%-36%.”
In a separate presentation to investors on Wednesday, PPC said 54% of its sales in Zimbabwe are now in foreign currency. The company said, in terms of forex receipts, it is profiting from domestic forex sales, foreign direct investment-funded projects, and diaspora demand.
The company previously struggled to repatriate its earnings to South Africa in dividends. But, since November 2020, PPC has managed to send US$10.6 million in dividends. In total, PPC has repatriated US$95 million from Zimbabwe since 2010. The company has now cleared all its Zimbabwe debts, which stood at US$18.9 million in December 2019.
Cement consumption across the industry has grown to 1.4 million tonnes per year, from below one million tonnes in 2017. PPC expects demand to reach 1.6 million tonnes next year.
Previously, PPC has said it was supplying 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.
To sustain growth, PPC plans to “grow retail volumes by targeting micro retailers and entrepreneurs”, evidence of the growing influence of the informal sector in Zimbabwe’s economy.
To show how individual home builders are driving cement sales, 79% of PPC’s sales are in bags, and the remainder in bulk.
Mining, PPC says, “is a growing segment with potential to unlock further volumes”.