LISTED cement manufacturer, PPC Zimbabwe hopes the bold move taken by the government to cancel cement import licences for several dealers will go a long way in propping up local cement sales.
In 2021, Zimbabwe imported US$41,4 million in Cement, mainly from Zambia (US$35,3 mln), South Africa (US$6,17 mln), China (US$7,22k), Botswana (US$1,72k), and Japan (US$1,56k) in the process choking local companies who continued to face depressed demand.
Local producers have however criticized the imports arguing that 2,6 million tons of cement per annum can be produced with demand hovering around 1,5 to 1,6 million tons per annum .
Presenting the summarized consolidated financial statements for the year 2023, PPC Zimbabwe CEO, Roland van Wijnen pinned hopes on the government's initiative to cancel import licenses for several dealers.
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"Government reduced the number of import licences in January 2023, which will support the recovery of PPC's market share," he said.
The company reported that during the period, the volumes year-on-year were down 16% despite robust cement demand from concrete product manufacturers and government-funded infrastructure projects.
PPC Zimbabwe was able to implement US$ price increases to recover input cost inflation.
Further, PPC Zimbabwe continued to generate adequate sales in foreign currency to sustain its operational requirements during the period and pay dividends.
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The company received a US$8,9 million in dividends during the year totalling R147 million net of withholding tax (compared to US$6,2 million in the prior year)," said the company.
The impact of the planned extended kiln shutdown in the first half of the year for special maintenance and the installation of the bag house and bucket elevator resulted in limited clinker production and ultimately restricted the volumes of cement sold.
In addition, plant stoppages due to power interruptions negatively affected performance.
As a result, revenue decreased by 19% to R1 753 million but due to price increases, margins increased to 20,8%.
Added van Wijnen, "PPC will continue to focus its resources on Southern Africa while preserving its sound market position in Rwanda. The group has defined a series of value-accretive projects to reduce CO2 emissions and future proof the business.
"There is a need for further operational efficiencies and cost containment measures to mitigate rising input costs as the economic climate in its key South African market remains muted and competition remains high across the portfolio."
