Displaying items by tag: South Africa

South Africa: PPC (formerly Pretoria Portland Cement) has announced that full-year profit in 2013 was increased by 10% after improved sales in its home market and neighbouring Zimbabwe. Net income rose to US$92m in the 12 months to September 2013 from US$83m in 2012.

"Cement sales in our home territories, particularly Zimbabwe and South Africa, have shown good growth," said Ketso Gordhan, chief executive officer of PPC.

PPC is expanding in Africa through acquisitions to offset tougher competition in its domestic market. The company will have three new plants operating in the Democratic Republic of Congo, Rwanda and Ethiopia by the end of 2015, boosting capacity by more than a third to as much as 11Mt/yr.

"Due to modest growth, the domestic trading environment remains tough and highly competitive," said a PPC representative. "We are on track to meet our strategic objective of generating 40% of our revenues from the rest of the continent by 2017."

Zambia: The Competition and Consumer Protection Commission (CCPC) of Zambia has started a study to investigate cement price rises in South Africa, Botswana, Tanzania and Zambia. The four sub-Saharan countries were chosen by the CCPC as a case study because they had similar companies producing and selling cement locally according to CCPC public relations officer Hanford Chaaba.

"We have been monitoring this situation concerning price changes for quite some time now and a study has been focused on these countries because the same producers of cement in Zambia have established factories in South Africa, Tanzania and Botswana," said Chaaba. He added that a similar study is also being conducted for the sugar and poultry industries.

South Africa: Cement imports from Pakistan to South Africa will continue and are expected to increase, says Qamar Zaman, commercial secretary at the High Commission of Pakistan in South Africa.

In 2012, issues were raised about the quality of Pakistani cement but Zaman said that lower prices gave his country's imports a competitive edge. South Africa consumes about 12Mt/yr of cement, with imports sitting at 5%, according to Stanlib analyst Anashrin Pillay.

Multinational cement producer Lafarge complained publicly about Pakistani imports of cement into South Africa in mid-2012, mentioning poor quality and incorrectly packaged quantities. Zaman defended Pakistani cement, saying over the past decade it had been refined and the production processes were now 'of a high standard.'

South Africa: PPC (formerly Pretoria Portland Cement) has announced details of an agreement to buy a controlling stake in Safika Cement Holdings for US$35.3m, according to a Johannesburg Stock Exchange release.

"We are very excited to be able to add another complimentary business to PPC. This is an important step in our 'Keeping the Home Fires Burning´ strategy. The proposed transaction is subject to approval by the regulatory authorities as well as the conclusion of the due diligence process," said chief executive officer of PPC Ketso Gordhan.

Safika is a blended cement producer that owns five blending plants and one milling operation. It produces blended 32.5N cement under three brands: IDM Best Build, Castle and the Spar Build-It house brand.

South Africa: Sephaku Holdings has reported that it is on schedule to commence production of cement at its associate company, Sephaku Cement, in the first two quarters of 2014. Sephaku Cement is a subsidiary of Nigerian multinational cement producer Dangote Cement. In its nine-month financial report to 31 March 2013 Sephaku reported that construction of the US$320m Delmas grinding plant and the Aganang clinker and cement plant were both at an advanced stage of development at end of 2012.

The Delmas cement milling plant in Mpumalanga will receive approximately 55% of the clinker produced at Aganang for further processing and is on track for completion in the final quarter of 2013, with production due to start in January 2014. The Delmas plant will have annual cement production capacity of 1.4Mt/yr. The Aganang plant in North West Province will commence production in the second quarter of 2014 with the capacity to produce 1.9Mt/yr of clinker and 1.2Mt/yr of cement when fully commissioned.

In the global cement news this week, we see that PPC (the former Pretoria Portland Cement), a large-scale domestic player in the South African cement industry, has taken it upon itself to provide association-like services to cement and concrete consumers in the country. PPC says that it felt obliged to supply information on things like quantity analysis, setting advice and product testing in the place of the now-defunct Cement and Concrete Institute (CCI).

The CCI, lambasted by PPC and other cement producers for years, was accused in April 2013 by PPC of not providing the kind of advice and services that cement producers should expect from an association. PPC, Lafarge and AfriSam all pulled funding and the CCI collapsed.

If the CCI had simply ceased to exist, PPC's new stance, putting its own cash into industry-wide assistance, might be seen as laudable. However, the CCI has been re-born as the Concrete Institute (CI), an organisation that is, by its own admission, no longer on the lookout for the interests of the whole industry. The CI is largely backed by Sephaku Cement, itself majority owned by the Nigerian cement juggernaut Dangote Cement, making PPC's stance suddenly look like one of self-preservation. Dangote is making rapid progress in the sub-Saharan cement industry and firms like PPC cannot afford to let it sweep aside the status-quo in South Africa.

The speed and scale of Dangote's rise, covered previously in this column, is huge. Nigeria's largest company now has interests in Senegal, Zambia, Tanzania, Congo, Ethiopia, Cameroon, Ghana, Sierra Leone, Ivory Coast and Liberia as well as Nigeria and South Africa. Not a month goes by without the announcement of another upgrade, plant or project. Dangote has a fantastic position in its domestic market that has enabled these new projects to be funded.

By contrast PPC is battling a stale construction market in South Africa. South African cement sales fell by 3.8% year-on-year in the fourth quarter of 2012. To counteract this, PPC has committed to expand outside of South Africa to the tune of 40% of total production by the start of 2016. It announced in early 2013 that production is on track to come online in Rwanda, Ethiopia and the Democratic Republic of Congo by the fourth quarter of 2015. Zimbabwe is expected to follow suit by the middle of 2016. It already has interests in Botswana and Mozambique.

With two of its largest home-grown cement producers both expanding rapidly outside of their domestic markets, and a relative lack of interest from the big four multinationals, the sub-Saharan cement market is set for big changes in the medium to long term. PPC and Dangote are expanding towards each other and already share many markets. Dangote has expanded more rapidly and is moving towards exports from Nigeria. PPC is catching up by taking shares in strategically-placed plants. Is sub-Sahara headed for a showdown...? Whatever happens, the future of this rapidly-growing market will certainly be interesting.

South Africa: PPC (formerly Pretoria Portland Cement) launched a news and cement services 'online service desk' on 11 June 2013. The digital service follows hot on the heels of a mobile cement calculator app that can help calculate the amount of cement required for a specific job and offers real-time advice on how and when to lay concrete, based on local weather conditions.

PPC's said that it felt 'an obligation' to provide its customers (and those of the South African cement industry in general) with the information after it pulled its financial support from the Cement and Concrete Institute in April 2013. The CCI has since been dissolved. PPC had accused the CCI of being outdated and no longer able to supply the services that it, as a producer, required from an association. PPC's exit was quickly followed by AfriSam and Lafarge.

Aside from its digital services, PPC will also provide financial and technical support to universities to help develop SA's building materials and civil engineering industries. It will also expand its cement and concrete testing services, as the institute closed its testing laboratory years ago.

The CCI has since been re-established as the not-for-profit organisation the Concrete Institute (CI). It is headed by former CCI managing director Bryan Perrie, who stated that the CI is no longer representative of the whole South African industry. It is strongly linked to Sephaku Cement, which itself is majority-owned by Nigeria's dominant producer Dangote Cement.

South Africa:PPC (Pretoria Portland Cement Company) plans to build a 1Mt/yr plant costing US$200m in the Democratic Republic of Congo, according to its chief executive in an interview with Reuters. The South African cement producer aims to make at least 40% of its sales outside of South Africa by 2016.

"By the last quarter of 2015 we should begin cement production almost simultaneously in Ethiopia, Rwanda and the DRC. Zimbabwe will probably be six to nine months later," said chief executive Ketso Gordhan. He added that PPC is also looking at opportunities in Zambia, Tanzania and Malawi.

PPC reported its interim results for the half-year ending on 31 March 2013 on 16 May 2013. Profit fell by 20% year-on-year to US434.8m but total revenue rose by 8% to US$409m. Gordhan added that rising cement sales volumes for the half-year had been tempered by low sales in Botswana.

South Africa: Pembani Group, an investment holding company, has become the controlling shareholder of South Africa's second-biggest cement producer, AfriSam, by way of a debt restructuring process. Following a debt restructuring process the Government Employees Pension Fund will hold about 57% of the company and Pembani 38%.

"The company's balance sheet was significantly strengthened by an overall debt reduction in excess of US$1.62bn. A consortium of local financial institutions provided the company with a sustainable long-term debt solution," said AfriSam CEO Stephan Olivier.

AfriSam was severely burdened by debt created by a leveraged buyout in 2007. It nearly defaulted on its debts in 2011. In 2012, all the relevant stakeholders agreed to a consensual restructuring of the debt, whereby the government Employees Pension Fund and Pembani Group injected significant equity into the business and Pembani would exercise strategic control over AfriSam's board.

South Africa: Chinese cement producer Jidong Cement has secured US$86.6m loan towards building a new cement plant at Koedoeskop in the northern state of Limpopo, South Africa. The 1Mt/yr greenfield project, Mamba Cement, comprises Jidong Cement and the China-African Development Fund, Wiphold.

"A master finance agreement was entered into between Nedbank Capital, Bank of China and a special-purpose vehicle known as Mamba Cement Company," said Nedbank head of infrastructure Brett Botha. South African bank Nedbank signed an agreement with Bank of China for the project on 27 March 2013.