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Construction boom in Zimbabwe spurs growth for PPC
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The construction sectors in Zimbabwe and South Africa are showing strong signs of sustained growth, creating favourable conditions for companies like Pretoria Portland Cement (PPC) to increase competitiveness and expand their footprint across the region's infrastructure landscape.
According to market data released on Tuesday, the South African cement market reached an estimated 13.78 million metric tonnes in 2024 and is projected to grow at an annual rate of 2.5% through to 2034. The outlook reflects consistent demand for building materials amid public and private sector investment in infrastructure.
Zimbabwe's construction industry is experiencing similar momentum, underpinned by government-led infrastructure programmes, expansion in retail and commercial real estate, and a residential housing boom. The growth has been a boon for the construction supply chain, especially for cement and brick manufacturers.
PPC CEO Matias Cardarelli expressed optimism about South Africa's prospects under the recently formed Government of National Unity, saying the company expects renewed focus on infrastructure. "The construction sector plays a critical role in driving economic growth through job creation and related activities. We believe the administration recognises this, which makes us optimistic that we will see tangible progress in the short term," said Cardarelli.
In Zimbabwe, PPC is investing in renewable energy solutions to counteract the impact of power cuts on operations. The company is currently developing a solar power plant under an offtake arrangement to stabilise electricity supply for its cement production facilities. Cardarelli said the Zimbabwean construction market is showing annual growth, creating a stable investment environment. "We are not expecting any change to that trend," he told Business Report.
However, liquidity constraints - particularly in Zimbabwe's public sector - have added pressure on construction companies. Masimba Holdings, one of the country's major infrastructure firms, recently noted that although its order book remains strong, cash flow challenges persist due to delayed payments and rising debtors' books. "A lack of liquidity within the market hampered effective execution," the company warned in its latest financial update.
Despite these headwinds, PPC's performance in Zimbabwe has been robust. The company recorded a 6% improvement in EBITDA margins, reflecting efficient cost control and increased operational output. For the financial year ending March 2025, PPC reported headline earnings per share of 40 cents, more than double the 19 cents recorded the previous year. This was achieved despite a 1.9% decline in revenue to R9.871 billion.
EBITDA rose by 28% to R1.593 billion, while operational free cash flow increased to R1 billion. The strong cash position enabled PPC to raise its dividend to 17.6 cents per share, up from 13.7 cents in the previous year. Cardarelli credited the improved results to strategic cost management and a focus on unlocking underutilised value within the business. "We have performed ahead of our expectations," he said.
As infrastructure development accelerates across southern Africa, PPC is positioning itself to ride the wave of new projects and expanding demand. With strong fundamentals, strategic investments in energy security, and a disciplined approach to capital allocation, the company appears poised to maintain its upward trajectory in both Zimbabwe and South Africa.
According to market data released on Tuesday, the South African cement market reached an estimated 13.78 million metric tonnes in 2024 and is projected to grow at an annual rate of 2.5% through to 2034. The outlook reflects consistent demand for building materials amid public and private sector investment in infrastructure.
Zimbabwe's construction industry is experiencing similar momentum, underpinned by government-led infrastructure programmes, expansion in retail and commercial real estate, and a residential housing boom. The growth has been a boon for the construction supply chain, especially for cement and brick manufacturers.
PPC CEO Matias Cardarelli expressed optimism about South Africa's prospects under the recently formed Government of National Unity, saying the company expects renewed focus on infrastructure. "The construction sector plays a critical role in driving economic growth through job creation and related activities. We believe the administration recognises this, which makes us optimistic that we will see tangible progress in the short term," said Cardarelli.
However, liquidity constraints - particularly in Zimbabwe's public sector - have added pressure on construction companies. Masimba Holdings, one of the country's major infrastructure firms, recently noted that although its order book remains strong, cash flow challenges persist due to delayed payments and rising debtors' books. "A lack of liquidity within the market hampered effective execution," the company warned in its latest financial update.
Despite these headwinds, PPC's performance in Zimbabwe has been robust. The company recorded a 6% improvement in EBITDA margins, reflecting efficient cost control and increased operational output. For the financial year ending March 2025, PPC reported headline earnings per share of 40 cents, more than double the 19 cents recorded the previous year. This was achieved despite a 1.9% decline in revenue to R9.871 billion.
EBITDA rose by 28% to R1.593 billion, while operational free cash flow increased to R1 billion. The strong cash position enabled PPC to raise its dividend to 17.6 cents per share, up from 13.7 cents in the previous year. Cardarelli credited the improved results to strategic cost management and a focus on unlocking underutilised value within the business. "We have performed ahead of our expectations," he said.
As infrastructure development accelerates across southern Africa, PPC is positioning itself to ride the wave of new projects and expanding demand. With strong fundamentals, strategic investments in energy security, and a disciplined approach to capital allocation, the company appears poised to maintain its upward trajectory in both Zimbabwe and South Africa.
Source - online
