REGIONAL cement maker PPC says its unit in Zimbabwe recorded a 35% increase in sales volumes in the period July to September 2020 compared to the same period last year.
BY MTHANDAZO NYONI
PPC operates a clinker plant in Gwanda (Colleen Bawn) in the southern part of the country, as well as a cement milling plant outside Bulawayo and another one in Harare.
Apart from South Africa and Zimbabwe, PPC also has units in Botswana, Ethiopia and Rwanda.
In its latest operational update, PPC said for the first six months of FY21, PPC Zimbabwe, and PPC Barnet experienced approximately 5% to 10% volume growth each compared to the prior comparable period.
“In the period July to September 2020, sales volumes in PPC Zimbabwe and PPC Barnet increased by 35% to 40% and 20% to 25% respectively, compared to the same period in 2019,” the update read.
“October 2020 has seen more moderate growth in cement volumes for PPC Zimbabwe at approximately 5% compared to October 2019, while PPC Barnet has continued to experience strong growth, with cement volumes up 25% to 30% compared to October 2019.”
In Rwanda, its unit experienced approximately 5% to 10% volume growth from April 2020 to September 2020 compared to the same period last year, and in the months July to September 2020 sales volumes increased by 15% to 20% year-on-year.
“Despite the continued positive sales momentum, the group remains cautious on the outlook for the rest of FY21 given the ongoing health crisis and its resultant impact on economic activity. PPC’s initiatives remain focused on cash preservation, improving cost competitiveness by lowering operational costs, positioning the business for recovery and improving internal controls and accountability”.
PPC said a strong recovery was experienced at PPC South Africa and Botswana from June, with double-digit year-on-year growth in cement sales volumes since June. In the three months July to September, cement sales volumes increased by 20% to 25% year-on-year.
“This trend has continued in October 2020 with strong cement sales volumes experienced for the month, up 15% to 20% compared to the same period last year.”
“These increased volumes are primarily retail led, as increases in disposable incomes due to reduced discretionary spending on other items … continued,” it said.
“PPC has also started to experience the positive impact of increased infrastructure spending, which it hopes will carry the strong demand once retail sales volumes return to more normalised levels.”
It said the international operations were less affected by the COVID-19 pandemic.
In aggregate, total cement volumes sold also showed double-digit growth in June 2020 to September 2020 compared to the same period in 2019.
PPC is undertaking a restructuring and refinancing project with the objective of implementing a sustainable capital structure and improving the investment prospects of the group.