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Gabriel Masvora, Business Editor
SOUTH Africa-based cement and lime producer Pretoria Portland Cement says construction of a new 700 000 tonne per annum mill in Harare has reached around 60 percent and the company was on course to meet its commissioning deadline by the end of the year.
The Johannesburg Stock Exchange listed group which is one of the most successful South African companies operating in Zimbabwe, said the rail siding which will link the plant to the main railway network for ease of transportation of both raw materials and products was also now 54 percent complete.
“Design work is almost complete, with 98 percent of equipment manufactured and 85 percent delivered to site, civil and structural construction is 55 percent complete,” said the company whose Zimbabwean unit is also listed on the Zimbabwe Stock Exchange.
In January last year, PPC secured $75 million to expand its Zimbabwe operations, with the bulk channeled towards the construction of the Harare plant. The company already runs two cement manufacturing plants at Cementside in Bulawayo and Colleen Bawn in Matabeleland South but sees the Harare investment as “a modern and efficient mill in the heart of the country (that) will give PPC an added competitive advantage.”
It also noted that most of its products were in demand in the northern part of the country hence the decision to invest “close to the market.” In addition, the company then, said, it was also aiming at supplying more into the Northern corridor which include exports to Zambia and other countries north of Zimbabwe.
The group said the project was on budget and fully funded from the $75-million loan. PPC said bi-annual capital repayments for the loan will start in December 16, around the same time when the plant will be expected to be online.
It added the tax allowances from the investments will result in zero cash tax for 2017.
Although the Zimbabwean operations have remained alive, PPC noted that local cement volumes were down by almost double digits due to increased regional competition which has been triggered by weakening domestic currencies. Zimbabwe uses the US dollar which has been firming against major regional currencies resulting increased appetite for imports as they are cheap.
Locals have resorted to buying some building materials from countries such as South Africa and Botswana arguing that they were cheaper that in Zimbabwe. PPC said worryingly the imports were increasing in spite of a number of barriers that Zimbabwean Government has put to protect local industry.
The company has been making marked investments inroads in Zimbabwe with a focus not only in new products but boosting capacity at its existing plants. In 2014 the company invested about $25 million at its clinker plant in Collen Bawn near Gwanda to improve efficiency and reliability of the factory.
The same year, PPC also installed a new palletised packing system and plastic cover wrapping machine at its Bulawayo factory resulting in production jumping more than two fold from 600 000 tonnes per year to 1,3 million tonnes. The machine was acquired from VFB Bocedi in Italy for $2 million and is capable to do about 200 bags per hour. Zimbabwe’s cement companies have a combined annual capacity of around 2 million tonnes, with Larfage and Sino Cement producing 400 000 and 250 000 tonnes respectively.
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