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PPC: cement sales in Zimbabwe are ‘ahead of expectations’, but policy still a worry

Cement producer PPC says cement sales volumes in Zimbabwe grew by a better-than-expected 19% in the six months to September, as the industry saw double-digit growth in demand for cement.

PPC, which says it holds a 57% share of the cement market in the country, however says the economy remains “challenging” due to frequent policy changes, forex shortages and illegal imports.

Cement sales volumes were driven by individual customers and government projects, PPC says in its latest update.

“Despite the challenging macro-economic environment, PPC Zimbabwe continues to trade well and ahead of expectations. For the six months ended 30 September 2021, PPC Zimbabwe’s cement sales volumes increased by 19% year-on-year due to retail demand, increased sales to concrete product manufacturers, and support from government-funded projects,” PPC reports.

PPC says, across industry, the growth in demand is in double-digits. A sign of that firm demand is that PPC is selling more cement right now than it did in 2019, before COVID-19 hit and slowed down economic activity. Compared to the same period in 2019, PPC’s sales volumes are up 31%.

The company has had to import 48 tonnes of clinker, an essential ingredient in the manufacturing of cement, “to support growing demand”.

PPC concerns

But there are concerns still for PPC. Forex shortages remain, PPC says, although they have eased because it can now sell in US dollars. Half of PPC’s sales are now in US dollars.

In April, government banned cheap cement imports to protect local industry. But illegal imports keep coming in, the company points out. On the policy front, reflecting the frustration across industry, PPC says “frequent fiscal and monetary policy changes” persist.

Revenue increased by 55% to R1.2 billion, supported by the increase in cement sales. PPC received US$2.7 million in dividends from its Zimbabwe operations over the period.

PPC is among leading construction firms feeding on demand for housing and from major government infrastructure projects.

The projects that PPC has supplied include; the Hwange power station expansion, the recently completed Muchekeranwa Dam, Gwayi-Shangani Dam, the new Manyame Air Base Hospital, National University of Science and Technology student accommodation, RG Mugabe International Airport, the Beitbridge-Harare highway and the Beitbridge Border Post expansion. (NewZWire)

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