LISTED cement manufacturer PPC Zimbabwe will next year be focusing on investing in solar projects as it looks to address the issue of power supply deficits.
The country was hard hit by rolling blackouts last year that lasted up to 18 hours daily, which crippled the operations of industry with companies incurring losses running into millions of dollars. This was caused by extremely low water levels at Kariba Power Station and the failure by government to retire debts to South African power utility Eskom and Mozambican power entity Hidroeléctrica de Cahora Bassa.
The cement manufacturer has invested nearly US$50 million towards setting a solar farm in Gwanda and Bulawayo. The land has been procured with discussion around the commencement now at an advanced stage.
The cement manufacturer anticipates an output of close to 32 megawatts at its Colleen Bawn factory in Gwanda and 10 megawatts in Bulawayo, which will be shared with the Harare factory.
PPC Zimbabwe managing director Kelibone Masiyane said the company is looking at issues of going green to ensure that its operations are not hindered by power supply challenges as well as enhance cleanliness in its operations.
It joins companies such as beverage manufacturer Schweppes Zimbabwe and diversified financial institution Old Mutual in putting up solar systems as part of its efforts to go green and alleviate electricity supply challenges.
PPC has also poured US$5,2 million on environmental sustainability initiatives in 2021 at its Colleen Bawn factory. Another two projects are expected to come on board in the New Year. These are a US$4 million investment in raw materials processing and a US$1 million investment in Shamva Mine.
However Masiyane told businessdigest that its expansion drive is threatened by cheap cement imports that have flooded the market and warned that this could also have an adverse impact on jobs within the sector.
“We have been talking to you about expansion which is basically investment and when you invest, you expect a return. But with the current state of affairs you have got imports coming in and Zimbabwe by its very nature, the costs of production is quite high compared to the region. So it becomes quite a challenge because its starts to threaten the viability of local companies, you know employment and things and like that,” Masiyane said
He said the company will also re-invest in the business to ensure continued viability.
“We always want to pour back into the business,” Masiyane said. “If you do not reinvest, you get to a stage whereby your equipment becomes highly inefficient and you start having regular breakdowns,” he noted.
Meanwhile an update on PPC Zimbabwe’s performance shows that despite challenging economic conditions and the impact of Covid-19 related lockdown restrictions, its cement sales for the period were in line with the overall market which grew 5% to 10%, supported by an increase in volumes of 35% to 40% in Q2.
“Revenue increased by 60% to R797 million (US$53,3 million) supported by higher realised selling prices in US dollars. EBITDA improved by 62% to R326 million (US$21,8 million). The positive sales momentum seen in Q2 was also experienced in October and November but at a normalised rate,” the company revealed in an update.
“PPC Zimbabwe continues to meet its debt obligations in the country, is financially self-sufficient, and recently declared a dividend to its shareholders.”