PPC invests US$19,5m

DUAL-LISTED cement producer PPC has invested US$19,5 million at its Colleen Bawn kiln plant in a move expected to boost production by 20%.

PPC finance director Gavin Stephens on Tuesday told businessdigest that cement production would soon increase to 2 200 tonnes per day from 1800 tonnes in March at its Bulawayo factory.

The company secured credit from its South Africa-based parent company before embarking on a four-month recapitalisation exercise. This comes on the back of prevailing shortages of the construction commodity and subsequent price hikes on the market. Cement prices have in the past few weeks almost doubled from US$9 per bag on the informal market as supplies become erratic at most hardware shops across the country.

During the exercise, the company shut down its kiln plant at Colleen Bawn to facilitate replacement of obsolete machinery. The plant has a capacity to produce one million tonnes of cement per year. It is understood that PPC acquired the new equipment in the last two years.

Cement kilns are used in processing of cement when calcium carbonate reacts with silica-bearing minerals to form a mixture of calcium silicates.

“The kiln plant at Colleen Bawn was shut down from March 8 to facilitate major work being undertaken with the replacement of the cooler and repairs to the kiln itself. The plant is due to start operations from July 11,” Stephens said.

“PPC Zimbabwe’s Bulawayo cement factory has not stopped production during this period. It faces considerable milling and loading difficulties due to heavy load shedding, and since July 1 it had exhausted clinker stocks for the milling of cement product. This has resulted in a temporary local shortage, which is being addressed through the importation of clinker and cement from our South Africa parent company, PPC Ltd,” Stephens said.
He added that the exercise would reduce the firm’s energy requirements by 15%. The company, according to Stephens, expects production to be on an upward trend should energy supplies remain uninterrupted. Zimbabwe is generating 1100 MW of electricity a day against peak demand of 2200.
He said production at PPC, currently between 40-45%, would meet local cement demand, adding that production would be managed on a three month cycle of start-ups and shut downs which he said was inefficient and costly.

Meanwhile, PPC is planning a further investment in equipment which would boost daily production to 2 500 tonnes.

The PPC finance chief said rival cement producers — Lafarge and Sino-Zim are also facing production problems faced by the entire manufacturing sector.

Only few manufacturing companies with strong financial back-up mainly from foreign companies have since last year’s dollarisation successfully managed to recapitalise. Zimbabwe companies have in the past 10 years failed to acquire new machinery due to an economic recession. Despite economic reforms that have resulted in the use of multiple currencies, manufacturing companies continue to face a plethora of problems that include underfunding, unsustainable utilities and a prolonged energy crisis.

“However, like all cement plants, the facility is totally dependent on a constant uninterrupted supply of electricity and this has not been the case this year. We have however received assurance from Zesa that we will receive the required power for the start-up and commissioning of the new plant”, Stephens said.
PPC is a leading supplier of cement in Southern Africa, with eight manufacturing facilities and three milling depots in South

Africa, Botswana and Zimbabwe. These facilities are capable of producing more than seven million tonnes of cement products each year.

Bernard Mpofu