The Sunday News
Business Reporter
REGIONAL cement maker Pretoria Portland Cement says cement sales at its Zimbabwe unit went down between 30 and 35 percent in four months ending 30 July due to a challenging economic climate that has seen many building projects shelved.
The country has been experiencing economic challenges since the beginning of the year that has resulted in depressed activity on the construction sector weighing down on demands for construction material.
In a trading update, PPC said trading conditions in Zimbabwe remained challenging due to liquidity challenges and inflationary pressures.
“PPC remains focused on optimising its local operations and implementing its cash preservation strategy to ensure the business is self-sufficient. The devaluation of the Real Time Gross Settlement (RTGS) dollar versus the US$ impacted revenue, which declined by 30-35 percent in rand. Overall cement sales volumes contracted by 25-30 percent due to a weaker economic climate,” the company said.
PPC said cement pricing, which was aligned with input cost inflation, was higher than the previous comparable period.
The price of cement has also gone up in relation to the declining incomes of most workers in the country.
In 2016, PPC commissioned a US$82 million plant in Harare which has been supplying the northern markets and catering for exports to neighbouring countries north of Zimbabwe.
The company also owns two other plants in Zimbabwe, in Bulawayo and Colleen Bawn near Gwanda with a production capacity of 700 000 tonnes annually.
Although the Zimbabwean unit is struggling, PPC announced that its Rwanda unit is growing due to increased economic activity.
“In Rwanda, Cimerwa continues to benefit from increased construction activity and high economic growth. The successful completion of first phase de-bottlenecking of the plant has resulted in higher cement sales. Overall volumes for the period increased by 35-40 percent, coupled with stable pricing.”
The company also has operations in South Africa, Democratic Republic of Congo and Ethiopia.
It said in the outlook, PPC will continue to focus on stabilising the performance of its core operations and positioning the group for future growth.
