PPC eyes new Zimbabwe cement plant

PPC Ltd, Zimbabwe's biggest cement producer, has signed an agreement with Sinoma Overseas that could pave the way for the construction of a new cement plant in Zimbabwe as demand for building materials continues to rise.

The partnership will initially focus on improving efficiency and production at PPC's current operations, but the agreement also includes plans to assess the feasibility of expanding clinker production and building a new integrated cement factory in the country.

In a statement, PPC said the partnership would involve "an assessment of the capital expenditure and investment requirements to potentially increase clinker and cement production from current levels by building a new integrated cement plant in Zimbabwe".

PPC Zimbabwe managing director Ndima Rawana said the company sees strong long-term growth potential in the local market.

"Collectively, we aim to improve efficiencies and production levels at our current assets and potentially establish new clinker and cement production capacity in Zimbabwe," said Rawana.

Zimbabwe has become one of the strongest-performing markets for PPC Africa in recent years. For the 10 months to December, the group recorded a 4 percent increase in revenue, largely driven by stronger cement sales volumes in Zimbabwe, while operations in South Africa and Botswana remained flat.

During the 10 months to January, PPC Zimbabwe increased cement sales by 22 percent compared to the previous year, supported by sustained demand from both industrial and retail customers.

The Zimbabwean unit has also emerged as a key source of cash generation for the group. Over the past two years, PPC Zimbabwe paid US$49 million in dividends to PPC Africa, compared to US$33 million generated over the previous decade.

PPC group chief executive officer Matias Cardarelli said the company is now positioning itself for further expansion.

"PPCZ's cement sales and results have increased over the past two years, and we are now starting to prepare ourselves for the next growth phase," said Cardarelli.

PPC currently operates cement plants in Harare and Bulawayo with a combined annual production capacity of 1.4 million tonnes, giving the company more than half of Zimbabwe's cement market.

The company is also investing in energy security through the installation of two solar power plants with a combined capacity of 30 megawatts to support operations previously disrupted by electricity shortages.