Displaying items by tag: PPC
Vietnamese imports reignite South African regulation battle
21 November 2012South Africa: The South African National Regulator for Compulsory Specifications (NRCS) has confiscated 'sub-standard' cement imported from Vietnam and is investigating complaints lodged about the quality of two other imported brands.
Daniel Ramarumo, a NRCS spokesman, confirmed that it had received complaints from NPC-Cimpor about Vietnamese cement, which was 'later confiscated by the regulator' in August 2012. The NRCS received a second complaint in September 2012 about Lucky Cement and had instituted an investigation. A third complaint from NPC-Cimpor was lodged on 5 November 2012 about Lucky Cement and Falcon Cement. He said that these complaints were currently under investigation.
PPC (Portland Pretoria Cement) chief executive Paul Stuiver commented that his company had tried to engage with the NRCS about allegedly inferior quality and underweight imports but was 'getting nowhere' because the NRCS had indicated it had tested the cement and it had complied with the standard. Stuiver now plans to raise the issue with the Economic Development Minister Ebrahim Patel.
Stuiver also added that one of the imported cement brands had an elephant on its bags, which resulted in PPC taking them to the Advertising Standards Authority and 'getting them stopped', as PPC also has an elephant on its bags.
PPC to meet Zimbabwe ‘indigenisation’ requirements
19 November 2012Zimbabwe: South African cement producer PPC (Pretoria Portland Cement) has announced that its Zimbabwe subsidiary Portland Holdings Limited (PHL) has been awarded an indigenisation certificate by the government of Zimbabwe.
Zimbabwe's Indigenisation and Economic Empowerment Act requires that non-indigenous manufacturing companies operating in Zimbabwe must submit an empowerment plan, to satisfy a 51% indigenous Zimbabwean ownership requirement by October 2015. PHL had a pre-existing indigenous shareholding of 21.4%. It will sell an additional 29.6% to four indigenous parties in the country.
"We see the Zimbabwe market as an exciting growth opportunity and expect our operations to approach full capacity over the next two-three years. This opens up further investment opportunities for PPC in Zimbabwe," said PPC chief executive officer, Paul Stuiver.
PHL is the largest cement producer in Zimbabwe. Together the clinker manufacturing plant in Colleen Bawn and the milling depot in Bulawayo can produce over 1Mt/yr of cement. Zimbabwe has experienced a rapid increase in cement demand since 2009. National cement demand is currently estimated at more than 1Mt/yr.
PPC reports 9% revenue boost in 2012
14 November 2012South Africa: PPC (Pretoria Portland Cement) has reported that its revenue increased by 9% to US$837m for its financial year ending on 30 September 2012 compared to US$777m in 2011.
The leading South African cement producer reported that its gross profit rose by 9% to US$289m in 2012 compared to US$265m. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 8% to US$265m from US$249m. However, net profit decreased by 2% to US$96.1m from US$98.5m. The group attributed this to an increase in taxes in the year.
"Despite another year in a tough economic environment, characterised by overcapacity in the industry, competitive cement pricing, rising energy costs and strike action in adjacent industries, Team PPC delivered good results by improving efficiencies and increasing normalised earnings by 11%," said outgoing PPC chief executive officer Paul Stuiver.
PPC's overall cement sales volumes fell by 3% following lower sales in Botswana and reduced exports, which were partly offset by growing demand in Gauteng, Port Elizabeth and Zimbabwe. PPC's South African cement sales volumes declined by 1%, mainly due to a subdued final quarter of the 2012 financial year. In its financial report PPC warned against cement imports, which it estimated represent 6% of South Africa's national demand.
In its outlook PPC predicted that labour unrest in the mining industry and a transport strike will reduce growth for the remainder of 2012. For 2013 the company is hoping for South African infrastructure programmes to push demand. Markets in Zimbabwe and Botswana should continue growing.
Ketso Gordhan appointed CEO of Pretoria Portland Cement
17 October 2012South Africa: Pretoria Portland Cement (PPC), the biggest producer of cement products in South Africa, has appointed Ketso Gordhan as CEO from 1 January 2013. Gordhan will succeed current CEO Paul Stuiver, who will have completed his contract.
Gordhan will join the group's board as CEO-designate from 1 November 2012. His most recent role has been in the South African Presidency, where from 2009 he developed performance metrics and targets for government ministries. Before working for the Presidency, Gordhan was head of private equity at FirstRand Financial Services Group for almost a decade. He was also city manager of Johannesburg between 1999 and 2000.
Previously Gordhan was the campaigns manager for the African National Congress and policy co-ordinator between 1990 and 1994. He was also director-general of the Department of Transport between 1994 and 1999 and was involved in privatising Airports Company SA and setting up the first privately funded toll road to Maputo. The South African National Roads Agency was also created during this period.
"Ketso brings a wealth and blend of experience in business and in government, as well as knowledge of various industries," said PPC group chairman Bheki Sibiya.
South Africa: Pretoria Portland Cement (PPC) has been granted environmental authorisation by the Western Cape Department of Environmental Affairs and Development Planning for the second phase of its Western Cape modernisation project. This includes replacing two ageing cement kilns at its Riebeeck plant with a new five stage preheater kiln. However, interested and affected parties could still appeal the decision.
PPC has completed the first phase of its modernisation strategy, a US$33m upgrade of a cement kiln at the De Hoek plant near Piketberg, resulting in improved environmental performance and thermal efficiency. PPC embarked on its modernisation strategy to ensure that it will have competitive, energy-efficient plants that comply with future changes to South African environmental legislation. It estimates that the complete modernisation strategy will be sufficient to meet Western Cape cement demand until 2022.
Lafarge wants Pakistan exports to South Africa blocked
01 August 2012South Africa: Lafarge is considering approaching the International Trade Administration Commission of South Africa to protect the local market from what it calls 'low-quality cheap cement' imported from Pakistan. The multinational is concerned that substandard products are being used for large infrastructure projects in the country, including the construction of hospitals, government housing and schools. Some importers are labelling cement as flour to dodge quality tests. Yet when the regulators do test imported product, they refuse to disclose the outcome, citing confidentiality.
"Imports are a concern for several reasons; sometimes the prices are very low, which affects us financially. We are looking at approaching the International Trade Administration Commission of SA to intervene in the market, but no decision has been made," said Lafarge South Africa CEO Thierry Legrand. He added that some cement sellers did not comply with the National Regulator for Compulsory Specifications, yet had import licences. Other domestic producers including AfriSam and Pretoria Portland Cement have also expressed concern at the situation.
In 2011 three companies importing from Lucky Cement, Pakistan's biggest cement exporter, were shut down. Cement and Concrete Institute (CCI) managing director Bryan Perrie said that 140,000t of cement were imported into South Africa in the first quarter of 2012 and that a substantial portion of it probably came from Lucky Cement. "People have struggled to keep accurate import statistics of cement but we know that Lucky is a major importer. People bring cement in as flour, so the statistics of how much comes in is often incorrect," he said.
Importers in South Africa are supposed to test samples for every 500t of imported cement. Yet when the CCI asked third-party regulators about the results of these checks, they were told this was confidential. The CCI had asked the regulator to publish a list of cement importers online, recording which products had letters of authority, but this has not happened.
South Africa: Pretoria Portland Cement (PPC) has seen its sales volumes drop by 3% year-on-year in the first half of 2012, which ended on 31 March 2012, mainly due to weak demand from Botswana and the Western Cape region of South Africa. However, the overall group revenue rose by 8% over the same period of 2011 from US$395m to US$427m, due to positive pricing of cement and lime products.
"Our results improved despite being tempered by weak demand in the Western Cape and Botswana and fierce competition on cement prices in all our regions," said PPC CEO Paul Stuiver.
PPC's earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 5% in the half-year, from US$126m to US$132m. Operating profit rose by 4%, from US$99.3m to US$104m. However, costs of sales were 11% higher than in 2011. The group said that it continued to be significantly affected by higher electricity and diesel prices, which both rose by 30% in 2011.
AfriSam settles over cartel claims
02 November 2011South Africa: The South African Competition Commission has reached a settlement agreement with AfriSam, which has admitted that it took part in a cement cartel.
AfriSam has agreed to pay a penalty of USD16m representing 3% of its 2010 cement annual turnover in the Southern African Customs Union (comprising South Africa, Botswana, Lesotho, Swaziland and Namibia). This settlement is a reflection of AfriSam's material cooperation with the Commission in uncovering and providing further information on its conduct.
"This settlement is a reflection of AfriSam's material co-operation with the commission in uncovering and providing further information on the conduct," the commission commented on 1 November 2011.
This agreement follows the Commission's investigation of price fixing and market allocation against four main domestic producers Pretoria Portland Cement Company Limited (PPC), Lafarge Industries South Africa (Lafarge), AfriSam Consortium Ltd and Natal Portland Cement Cimpor (NPC-Cimpor). Previously, PPC applied for leniency and confirmed the existence of a cartel among the four cement producers. In terms of the settlement, AfriSam admits that it entered into agreements and arrangements with PPC, Lafarge and NPC to divide markets and indirectly fix the price of cement. The case against Lafarge and NPC continues.
"To facilitate this process we conducted a systematic and comprehensive review of some of the company's business practices from a competition law perspective," Stephan Olivier, AfriSam CEO stated. "We are, of course, saddened and embarrassed by what has happened. I say categorically that the AfriSam of today is an honourable and ethical company, fully committed to rigorous compliance with competition law."