PPC to seek African acquisition, South African sales down

PPC to seek African acquisition, South African sales down
Published: 26 January 2010

South African cement producer, Pretoria Portland Cement Co (PPC) is seeking to make an acquisition or enter a new market in sub-Saharan Africa in the next 12 to 18 months.

PPC “is looking quite carefully and very deliberately to grow outside” its existing markets, Chief Executive Officer Paul Stuiver said at PPC’s annual general meeting in Johannesburg today.

A takeover would help compensate for slowing rates of growth in South Africa, PPC’s main market, Stuiver said. Cement sales grew on average by more than 10 percent from 2006 to 2009, driven by investment in infrastructure ahead of the Soccer World Cup scheduled for kick-off in June.

“Interesting” opportunities to make acquisitions or to develop new export markets exist in countries such as Nigeria, Angola and other oil-producing nations on the continent’s west coast, Stuiver said in an interview.

Interesting markets also include Democratic Republic of Congo and countries in east Africa, Stuiver said. The “drivers for investing” would be measured by assessing the target country’s potential economic and population growth in the next 10 to 20 years.

Meanwhile the company said it expects cement demand in 2010 to be lower than 2009 after sales in its first quarter were down compared to a year-ago as a slowdown hits the residential property market.

It said regional cement sales during October 2009 were down 15 percent compared to a year-ago as demand for cement in South Africa’s main cities fell.

The cement company, which supplies cement to infrastructure projects such as Eskom’s Medupi power station, said the economic slowdown would continue to affect business and it expected demand for 2010 to be lower than the previous year.