Zim cement market growth excites PPC

The Herald

Oliver Kazunga Senior Business Reporter

PRETORIA Portland Cement (PPC) says the Zimbabwe cement market continued to show strong growth on the back of individual residential housing construction and Government-funded infrastructure development projects.

Under the National Development Strategy 1 (NDS 1), the Government has prioritised infrastructure development investing in projects such as road and dam construction as well as national housing projects as part of improving the living standards of citizens and rebuilding the economy.

This dovetails with the Second Republic’s vision of transforming Zimbabwe into an upper middle income economy by 2030.

In its latest trading update for the five months ended August 31, 2022, the South Africa-headquartered cement manufacturing group, which has a footprint in Zimbabwe said: “The cement market in Zimbabwe continued to show robust high single digit growth as a result of both residential construction and government-funded infrastructure projects. 

“PPC Zimbabwe implemented planned maintenance at the beginning of financial year 23 and recorded a 7 percent decline in cement sales volume period.

“However, the resumption of clinker manufacturing by PPC Zimbabwe at the end of May 2022 enabled improved sales volumes in the second quarter of financial 2023.”

It said PPC Zimbabwe implemented US dollar price increases of 5 percent in March this year, 2 percent in April and a further 5 percent increase last month.

The cement producer said it noted increased availability of foreign currency in the Zimbabwean economy, with more than 70 percent of cement sales during the period under review occurring in foreign currency.

“PPC received a US$4,4 million dividend in June 2022 and anticipates an additional dividend to be declared upon the publication of PPC Zimbabwe’s interim results in November 2022,” said the group.

Meanwhile, PPC Zimbabwe managing director Kelibone Masiyane is on record saying there is no need for Zimbabwe to import cement as the leading cement manufacturer has adequate supplies and capacity to meet all ongoing construction projects by the Government and private sector.

This is on the back of the local cement industry players expressing frustration at the influx of cheap imported cement in the market, which they argue is threatening the viability of their operations locally.

Zimbabwe has the capacity to produce 2,6 million tonnes of cement annually against a national demand of between 1,5 to 1,6 million tonnes per year.

PPC Zimbabwe and Lafarge Zimbabwe control over 70 percent of the domestic market.

In an interview, one of the players in Bulawayo’s construction industry Mrs Melissa Mlilo said although locally-produced cement had better strength qualities compared to imported products, local cement was relatively expensive.

“People are preferring to buy imported cement based on pricing between the product produced locally and the imported one. But when it comes to quality and strength, cement produced locally has an upper hand,” she said.

Industry and Commerce Minister Dr Sekai Nzenza is on record saying Zimbabwe would increase monitoring and surveillance on cement imports from the region to protect local firms and shield customers from sub-standard shipments. Zimbabwe’s market attracts imported cement due to excess capacity in the region and higher prices offered on the domestic market,  especially from neighbouring Zambia, where the product retails for much less per unit.

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