PPC - October 2015
The second quarter of 2015 saw cement demand in South Africa grow by 1.5 per cent to 3.08Mt, compared to the same period last year. This has fallen considerably from the 15.6 per cent expansion seen in 1Q15. According to PPC, this flat volume growth, along with increased competition in the local market, is being blamed for the two per cent contraction in average cement prices in the South Africa market of late.
Speaking at the recent RMB Morgan Stanley conference in Cape Town, Darryl Castle, CEO at PPC, and Tryphasa Ramano, CFO, said that the company is “at or near the bottom of the cycle”, although increasingly competitive forces in South Africa, as well as Zimbabwe and Botswana, continue to weigh heavy on the near-term outlook. A ramping up of production in Rwanda is expected to offset some of this headwind, but increasing finance costs are forecast to counteract this.