PRETORIA Portland Cement (PPC) Zimbabwe says it remains optimistic that its performance will be in line with its planned targets, but expects to close the year lower than 2015 due to economic challenges besetting the country.
BY MTHANDAZO NYONI
PPC Zimbabwe managing director, Kelibone Masiyane, told NewsDay that the company was currently operating under harsh economic conditions which have seen its local sales volumes and exports tumbling in the first half of the year.
“We remain optimistic that our performance will be in line with our planned targets although we expect to close lower than last year,” Masiyane said.
In its provisional results for the six-month period ended March 31 2016, PPC said volumes, including exports, at its Zimbabwean unit went down 22% due to liquidity challenges, increased local competition and lower disposable income.
It said local selling prices for its cement also went down 3%.
As a result, the unit’s contribution to group revenue decreased 4%.
Masiyane said there has been a decline in local sales volumes compared to last year as they continue to operate in a depressed economy.
“This has been further exacerbated by imports from neighbouring countries. Export volumes remain poor due to a higher manufacturing cost base compared to the region as well as the stronger United States dollar against weaker regional currencies thus rendering the company uncompetitive in export markets,” he said.
However, despite harsh economic conditions they are facing, Masiyane said they expect the impact of imports to be reduced in the second half of our financial year as a result of support from government through its various interventions.
Commenting on the company’s performance in the first-half of the year last week, Masiyane said the business was depressed compared to last year.
The PPC boss, however, said good cost control measures had led to impressive declines in production costs and overheads.
The company has cement manufacturing plants at Cementside in Bulawayo and Colleen Bawn in Matabeleland South.
It is currently constructing an $80 million cement plant in Harare, which will have capacity to produce 680 000 tonnes annually.
The Harare project among others in Africa is expected to boost the demand of cement products.
Apart from South Africa and Zimbabwe, PPC also has units in Botswana, Ethiopia and Rwanda.