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Harare Bureau
PRETORIA Portland Cement (PPC) says it will start constructing a $200 million cement plant in north-eastern parts of the country next year, as the group’s African expansion gathers momentum.
“We intend to start construction during the second or third quarter of 2014, and complete at the end of 2016,” said Mr Gavin Stephens, PPC Zimbabwe’s director of business development in an e-mailed statement.
“We are at the final bankable feasibility stage for the project. The construction of the plant will bring considerable benefits to the community in which it will be located.”
The company also intends to construct a clinker production facility with a grinding plant near Harare and near Tete in Mozambique.
The main market area targeted is Harare region and the milling plant in Mozambique will target Tete region.
The combined cement output will be 1,2 million tonnes per annum, Mr Stephens said, adding about 250 direct jobs will be created with additional 100 supporting jobs plus many more downstream.
“Infrastructure currently under investigation include bulk electrical power supply as well as the required road network,” said Mr Stephens. PPC will finance supporting infrastructure, and this is not included in the $200 million.
“Funds would be sourced externally with the aid of the parent, PPC Ltd.
Local demand for cement is likely to surge, supported by strong recovery of the construction industry.
There is huge potential to rebuild the country and address the significant infrastructure bottlenecks, analysts say. According to African Development Bank, Zimbabwe requires $14 billion for infrastructure.
Under Zimbabwe’s new economic blueprint, ZimAsset, Government has come up with infrastructure cluster focused on the rehabilitation of infrastructural assets and the recovery of utility services in Zimbabwe. These services relate to water and sanitation infrastructure, public amenities, information communication technology, energy and power supply, transport (road, rail, marine and air).
Cement companies are also poised to benefit from the growing demand in residential and non-residential construction.
While analysts have pointed out that the primary risk to the construction sector was the shortage of international finance and foreign direct investment, PPC Zimbabwe chairman Mr Bhekokuhle Sibiya said prospects in Zimbabwe were bright after the 31 July harmonised elections.
“With elections in Zimbabwe concluded, we expect continued growth in cement demand. The market has been dominated by retail clients and we look forward to increased infrastructure investment,” said Mr Sibiya.
PPC Zimbabwe profit for the year to September was 10 percent up to $92,03 million compared to the same period last year.
Elsewhere in Africa, PPC chief executive Ketso Gordhan announced it will have three more plants under construction by the end of the first quarter next year in the Democratic Republic of Congo and Ethiopia.
In Rwanda, the plant construction would come on stream in September next year. The country earmarked for the fifth project was not disclosed.
Mr Gordhan said the company’s capital expenditure budget for the current financial year was about R2,7 billion.
Mr Gordhan said PPC’s new plants in the DRC, Rwanda, Ethiopia and Zimbabwe would enable the company to achieve its target of generating 40 percent of its revenue from outside South Africa in the next four years.
“Our expansion strategy into the rest of the African continent has gained significant momentum, with identified projects progressing well in a number of countries,” Mr Gordhan is quoted in SA media. “Cement sales in our home territories, particularly Zimbabwe and South Africa, have shown good growth which gives us the confidence and ability to execute our expansion strategy.”
PPC’s group cement sales volumes rose by 7 percent despite a relatively poor performance in Botswana and Mozambique. Cement sales in Zimbabwe recorded double-digit growth for the period.
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