Botswana cement sales declining - PPC

Botswana cement sales declining - PPC
Published: 13 September 2010

South African cement producer PPC reported on Wednesday that its sales volumes in South Africa and Botswana were still declining, but at a slower rate than had been the case earlier in 2010, with some regions showing a modest growth in sales.

However, sales to the construction industry, which typically comprised about 20% of PPC’s sales, were significantly lower, while Zimbabwe sales during July were impacted by a longer-than-planned plant shutdown. Normal sales resumed in that country during August, however.

Overall, the volume outlook for 2010 remained "negative and uncertain", the company said.

Earlier in the year, CEO Paul Stuiver noted that the cement industry had entered its third consecutive year of decline.

However, he reiterated PPC’s view that the longer-term volume outlook remained positive in line with historical trends, growth forecasts and regional infrastructure development plans. Stuiver told investors that he did not foresee cement capacity in South Africa rising over the group’s next two financial years, but that it could begin to rise "marginally" during its 2013 financial year.

The JSE-listed company recently announced an overhaul to its Western Cape capacity expansion plans in light of the more subdued market outlook.

It cancelled plans for the new ZAR4.5bn, 1.2Mta year Se Kika project, in favour of a three-phase brownfield expansion plan at its Riebeeck and De Hoek facilities.

The new ZAR3bn replacement and expansion project would add a total capacity of 700,000tpa of clinker capacity over a six-year time horizon. The initial plan envisaged a net gain of 700,000tpa over a four-year period.