Pretoria Portland Cement Co, South Africa’s largest cement producer, slumped to a four-month low after the company said its cement sales in the country in the quarter through December declined by five per cent.
PPC’s cement sales followed this trend in most provinces with sales to the construction sector experiencing the greatest decline. On a provincial level, demand in the Western and Eastern Cape continued to be the most disappointing.
Cement demand in Botswana remained resilient and sales from our Zimbabwean operations continued to grow. However, a strong local currency constrained exports from our South African factories to Mozambique and Angola.
Weaker demand from the local steel and alloys industries resulted in lime sales declining compared to the comparable period last year whilst Aggregate sales declined in line with considerably lower activity in the construction industry.
The more subdued trading conditions that prevailed during the second half of the 2010 financial year in comparison to the first half of the 2010 financial year prevailed throughout the quarter ending 31 December 2010. The resultant lower sales across all divisions have had a negative impact on operating margins.
PPC continues to explore further opportunities in new and existing markets in sub-Saharan Africa. The nature of this activity tends to have long lead times. None of the opportunities have yet advanced to a stage where announcements can be made.
“We remain concerned over the outlook for the local building and construction industries in the short term and expect that demand for cement is likely to remain subdued,” the company said in a statement today.