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PPC rebounds after pandemic setback

by Staff reporter
30 May 2021 at 08:46hrs | Views
PPC Zimbabwe, the country's biggest cement maker, said on Friday it had posted strong first quarter recoveries as the Covid-19 scourge appeared to be under control, with abandoned projects now back on track.

Projects were frozen most of 2020, as government announced hard lockdowns to tackle the pandemic that was turning economies upside down, claiming a string of casualties in its path.

Demand for cement collapsed, hitting revenues and clobbering volumes across sectors.

In the aftermath of lockdowns, construction market jitters were compounded by reports of shortages.

But PPC managing director Kelibone Masiyane moved to calm the fears, telling Standardbusiness that volumes had been rebounding, with PPC surpassing budgets by 5% during the first quarter.

The firm operates a clinker plant at Colleen Bawn near Gwanda and cement milling plants in Harare and Bulawayo.

"We have experienced a phenomenal surge in terms of sales volumes despite the challenging operating environment," Masiyane said.

"We're talking roughly 5% above target in the first quarter of 2021 and we anticipate further demand on the back of an excellent agricultural season."

Masiyane said while the Colleen Bawn plant closed for scheduled maintenance, the business had been thrown off balance by reports that there was a bigger problem.

This led to fears that domestic cement makers were not well placed to meet demand, leading to extensive panic-buying.

The PPC boss also indicated that government's decision to protect domestic producers earlier this year had precipitated fears that producers were struggling.

"The perceived cement shortage may have been triggered by the recent import ban that is Statutory Instrument 89 of 2021 as gazetted by the government and also in combination with rumours that we had a plant breakdown in Colleen Bawn," he said.

"Firstly, government is aware of its role in protecting jobs and the cement industry.

"The country was being flooded by cheap and sub-standard cement posing a safety risk to the construction industry from a structural point of view.

"And the rumours about a breakdown were untrue. Secondly, our Colleen Bawn plant went into a planned maintenance programme."

Masiyane said after deploying fresh capital to expand capacities and construct new plants, cement makers were expecting returns, but these would be difficult to achieve under a glut of imports.

"There is an expectation of returns and that's why it is important that we try and reduce imports," he said.

"But again, because of the shutdown at Colleen Bawn, I think a lot of people then went into panic-buying and hoarding, which created artificial shortages.

"But I must say that Colleen Bawn is up and running.

"I expect that in the next week or so, cement shortages would be a thing of the past.

"The only challenge after our shutdown is power.

"We have spoken to Zesa, the power utility, because we are experiencing daily power dips at our Colleen Bawn plant and that's our key operations which should be running continuously, 24/7.

"But unfortunately since the shutdown, we failed to reach full potential of our plant because of these daily interruptions.

"But I must say we have engaged Zesa and together we are trying to find a solution and they are quite cooperative."

Masiyane added: "Normally, before you get into that shutdown, you ensure that there is an adequate stock of raw materials and cement, to a point that customers should not really feel that the plants are on maintenance.

"Since 1913, we have been a constant presence in Zimbabwe while the same annual maintenance works were being carried out without affecting the market in terms of supply.

"So this is something that we have done over many years and we have continued to perfect it.

"In this instance, due to a surge in demand as a result of panic-buying and hoarding, we ended up with an artificial shortage."

Source - the standard