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Dumisani Nsingo, Senior Business Reporter
CEMENT manufacturer, Pretoria Portland Cement (PPC) Zimbabwe, says its production and sales continue to rise since the commissioning of its $82 million plant in Harare late last year.
PPC Zimbabwe managing director Mr Kelibone Masiyane said the Harare plant has contributed immensely to the growth of the company’s business and managed to record the highest monthly sales volumes in 18 years.
“The Harare plant has contributed significantly to the double-digit volume growth experienced by PPC Zimbabwe compared to last year. In June 2017 we recorded the highest monthly volumes since June 1999 and this level of performance exceeded our expectations and justifies that investment,” he said.
Mr Masiyane was, however, not at liberty to divulge the figures but reports released at the beginning of the year revealed that the Harare plant doubled its total output to 1,4 million tonnes of cement.
He said the firming US dollar against regional currencies has, however, made the Zimbabwe product uncompetitive compared to similar products coming out of other markets.
“PPC Zimbabwe has always exported huge volumes to the neighbouring countries until recently. The reason for the reduction is simple economics — we cannot compete from a pricing point of view and the devaluation of regional currencies against the US dollar further compounding the issue,” said Mr Masiyane.
He said the company was planning to tap into Malawi and Mozambique markets.
“With the commissioning of our Harare plant and the increased footprint, we are now able to target countries like Malawi and Mozambique though pricing in those countries still remains a challenge for us,” said Mr Masiyane.
He, however, said although the country remains a lucrative market due to its dollarised economy, production costs have remained a challenge.
“Zimbabwe presents an attractive market to imports due to being a dollarised economy. Local cement producers find it difficult to compete with regional players due to high input costs and as a result, there is a present and clear threat to the survival of local players,” said Mr Masiyane.
He said the company was engaged in talks with the Ministry of Industry and Commerce and the Reserve Bank of Zimbabwe (RBZ) in an effort to address the challenge of lack of nostro accounts which was affecting its operations.
“Currently the top challenge is the inability to pay for foreign acquired goods and services as a result of tight liquidity and the disproportionately high cost of manufacturing compared to the neighbouring countries. We are currently working on solutions together with the support from the Ministry of Industry and Commerce and the RBZ,” said Mr Masiyane.
PPC also has two other plants in Zimbabwe, in Bulawayo and Colleen Bawn near Gwanda with production capacity of 700 000 tonnes annually.
Last month the company noted that it might be forced to shut down its Collen Bawn plant citing pressure from cheap imported clinker by other producers and smuggled cement, which frustrates its operations. -@DNsingo
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