Chronicle Editor
Rutendo Nyeve, Features Reporter
IN October 2023, PPC Zimbabwe appointed Mr Albert Sigei as the new managing director and he commenced work on 1 January, 2024.
He succeeded Mr Kelibone Masiyane who was appointed as the managing director of the subsidiary of South Africa-based PPC in 2016, having joined the company in 1994 as a trainee electrical engineer at the Colleen Bawn Plant.
In this week’s edition, Sunday News Features Reporter Rutendo Nyeve (RN) speaks to Mr Albert Sigei (AS) who briefs on his background, vision, challenges facing the cement industry as well as the prospects of the company.
RN: Good day Mr Sigei, congratulations on your new assignment. May you kindly tell us your background in the industry.
AS: I have enjoyed over 21 years of experience in the building materials sector within the African region. Among other senior leadership roles, I have served as Chief Executive Officer for Lafarge Cement Malawi, Chief Executive Officer of Cimerwa Limited (Rwanda), Managing Director (Concrete), VP Business Support of Lafarge Nigeria and Head of Strategic Initiatives for PPC Africa Group in South Africa. Proud moments in my cement industry career include leading the turnaround and listing of CIMERWA PLC on the Rwanda Stock Exchange and the tremendous business growth we managed to achieve with a different team as Managing Director of a new Ready Mix Concrete subsidiary of Lafarge Nigeria.
RN: You are now at the helm here in Zimbabwe, what is your vision for the firm?
AS: PPC Zimbabwe is a leading cement company in Zimbabwe with strong and iconic brands. Going into the future, our broad vision is to maintain our leadership position in the local market, and spiritedly compete in the region. We will achieve this by ensuring consistent availability of our products at the right price in support of Zimbabwe’s development. PPC Zimbabwe considers environmental responsibility, energy efficiency and employee safety as constant and intrinsic parts of our business. These will remain critical focus areas for our business going forward.
RN: Considering your vast experience in the sector, what are the challenges facing the cement industry?
AS: The main challenges facing our industry can be summarised as follows – (a) power (b) logistics (c) exchange rate volatility and inflation. Our industry is energy-intensive, and electricity is therefore, a key cost driver for our processes. In recent months, electricity tariffs have increased significantly, placing a huge strain on our competitiveness within the region as an industry. Power availability as well as the quality of power have remained as challenges for some of our plants. Regarding logistics, railroad logistics is still a problem both from reliability and cost perspectives compared to the region. Our business involves the movement of large quantities of bulky raw materials and finished goods. For the industry to optimise costs, rail logistics should be efficient, constantly available and reasonably priced. This is yet to be realised. Exchange rate volatility and hyperinflation are common constraints for all businesses operating in the country. Pricing and cost distortions arising from the foregoing put pressure on business margins. As a business, we have plans in place to address some of the challenges. We also continue to engage with Government stakeholders, regarding other challenges which require policy shifts. You will be aware that the company has plans to establish solar PV plants at the Bulawayo and Colleen Bawn factories to address problems relating to costs and unreliability of electricity. We are currently negotiating the funding terms and conditions and expect construction to commence soon. The company is also working on other strategic projects which will significantly lower the cost of its raw materials, while maintaining superior finished product quality. We will be able to discuss these projects with you in greater detail as we progress.
RN: Over the past five years, Government has undertaken a number of capital intensive infrastructure projects, how are these projects boosting PPC Zimbabwe’s performance?
AS: Government and Government -funded projects have been central to our business performance over the years. Our quality cement is consistently used on key Government projects such as road construction and power plant construction. We are grateful to the Government of Zimbabwe for creating an enabling environment for the industry as a whole. As PPC Zimbabwe, we will continue playing our part to support the Government’s infrastructure development agenda going forward by ensuring the availability of quality and value-for-money cement products in the market.
RN: The construction sector is on the rise with numerous private and public sector projects taking shape. Cement is key to this. Is your firm coping with the demand?
AS: Year to date, PPC Zimbabwe has continued to locally manufacture cement, and supply to the market without any interruptions. Our three plants have been operating at capacity consistently throughout 2023. Resultantly, our production and sales volumes have been better than prior years and within target. As you will be aware, the market experienced product shortages between September 2023 and November 2023, which were attributable to production challenges faced by some local manufacturers. The government stepped in by issuing import permits to assist in closing the supply gaps. We understand that all local manufacturers are now up and running and there is an oversupply in the market which is good for consumers.
RN: The cement industry has been hit by an influx of illegal imports. How is this affecting business and what do you suggest can be done to address the situation?
AS: The availability of United States dollars on the Zimbabwe market has caused our market to become a target for product dumping by some regional manufacturers, hence risking the heavy investments by local cement manufacturers. It is our respectful view that the Government should significantly reduce and strictly control cement import permits going forward, to level the playing field. In the past few years, local cement manufacturers have made huge capital investments to increase efficiency and capacity in order to meet local demand. On our part, PPC Zimbabwe invested more than US$ 80 million to build a new factory in Harare to double the production capacity. This is in addition to further investments to optimise capacity and improve efficiency in our Colleen Bawn and Bulawayo factories. Tighter management of import permits will help local cement manufacturers to compete on equal footing with imports, allow local manufacturers to recover capital investments, increase capacity utilisation, trade profitably and be able to reinvest some of the profits in business improvements, leading eventually to lower costs of doing business.
RN: What are your plans for the corporate social responsibility portfolio?
AS: We continuously strive to deliver on our purpose of empowering people to experience a better quality of life. We play an active social role in the up-liftment of communities in the areas which we operate, in order to create and maximise shared value for all. Our aim is to deliver sustainable initiatives in the areas of education, enterprise development, infrastructure development, and environmental protection. In line with this, working with community leaders, PPC Zimbabwe has committed to fund selected community development programmes in Matabeleland South, Matabeleland North, Shamva South and other areas for the benefit of local communities. We are excited about the incredible potential that these community programmes will have in uplifting these communities. – @nyeve14
Bongani Ndlovu