Solving energy challenges top priority: PPC boss

PRETORIA Portland Cement (PPC) Zimbabwe Limited’s new managing director, Mr Albert Sigei has said addressing energy challenges facing the firm would be critical in its quest to produce quality products that are competitive in the region.

In 2022, the giant cement firm unveiled a US$40 million solar power investment for its Bulawayo and Colleen Bawn plants, which will boost the firm’s energy requirements and help reduce the supply gap in the country.

The planned projects are expected to yield a combined output of 30MW, of which 17MW is for internal consumption with the excess of 13MW set to be fed into the national grid.

The Bulawayo plant will set up a 10MW plant, with 5MW earmarked for internal use while the Colleen Bawn plant will develop a 20MW capacity, 12MW being used internally.

The massive solar energy projects will also reduce the cement industry’s carbon footprint and go a long way in buttressing the Second Republic’s National Development Strategy (NDS1) ideals on increasing energy power supply through broadening the energy mix by promoting independent power production.

The Bulawayo factory is set to cover over 22 hectares of land.

Over 20 000 panels will be ground-mounted on this site and will be connected to the Bulawayo milling plant and the Zesa grid.

At Colleen Bawn factory, the plant will cover over 45 hectares of land with 18 megawatt-hours of battery energy storage system (BESS) to support the kiln to run for four hours during the night power outage.

Mr Sigei started work on 1 January after taking over from Mr Kelibone Masiyane who had served the firm for 26 years.

He told Business Chronicle yesterday that he is ready to go.

“I have been in Zimbabwe for two weeks and have visited both the Harare and Colleen Bawn factories and have had engagements with some stakeholders. I am looking forward to the task,” he said in his first media interview sharing his cement industry insights.

Mr Sigei has over 21 years’ of experience in the building materials sector within the Africa region.

Amon other senior leadership roles, he served as chief executive officer for Lafarge Cement Malawi, CEO of Cimerwa Limited (Rwanda) and head of strategic initiatives for PPC Africa group.

“Proud moments in my cement industry 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.”

Mr Sigei said power, logistics and exchange rate volatility are key issues that affect the cement industry.

“Our industry is energy-intensive, and electricity is therefore a key cost driver for our processes. In the recent months, electricity tariffs have increased significantly placing a huge sum on our competitiveness within the region as an industry,” said Mr Sigei.

“Power availability as well as quality of power have remained a challenge for some of our plants,” he added.

To mitigate power challenges, the cement firm is already working on setting up solar plants in Bulawayo and Colleen Bawn factories.

As a business, Mr Sigei noted that they have plans in place to address some of the challenges while at the same time continuing to engage with Government stakeholders regarding other challenges that require policy shifts.

“You will be aware that the company has plans to establish solar PV plants at Bulawayo factory and Colleen Bawn factory to address problems relating to costs and unreliability of electricity.

“The company is also working on other strategic projects which will significantly lower the cost of its raw materials, whilst maintaining superior finished product quality. We will be able to discuss these projects with you in greater detail as we progress.

“We are currently negotiating the funding terms and conditions and expect construction to commence soon,” he noted.

Chronicle understands that the firm has already entered into pre-agreements with power authorities and what is outstanding is on the funding part in terms of securing optimum arrangements about the structure of the funding.

The equity funders are said to be on board and debt financing has been approved.

A few years ago, the Government tabled various incentives to shore up investments in renewable energy in a bid to meet its target.

The incentives include Government guarantees for investors to remit dividends in foreign currency and be able to repay offshore loans.

The Zimbabwe National Renewable Energy Policy, launched in 2019 set the target of achieving a renewable capacity of 1 100 MW or 16,5 percent of overall electricity supply by 2025.

By 2030, it targets 2 100 MW or 26,5 percent of the overall supplies, which is in line with its pledge to reduce greenhouse emissions by 2030.

The policy also aims to have installed 250 000 solar geysers, increase the use of institutional and domestic biogas digesters, deploy the use of solar mini-grids and solar water pumping solutions, and boost the use of renewable technologies.

To encourage investments in renewables, Zimbabwe is offering other incentives including duty and tax exemptions and prescribed asset status for pension and insurance companies.