PPC eyes Africa expansion

Staff Writer | Wednesday November 9, 2011 00:00

PPC, which also makes lime and aggregates, said yesterday diluted headline earnings per share totalled 149 thebe in the year to September compared with 197 thebe a year earlier. Sales were flat at P6.2 billion ($854.4 million), highlighting slack demand.

South African cement sales are up 2.1% for first nine months of the year, Cement & Concrete Institute's data shows, as the industry struggles to recover after a building boom in the run up to the 2010 soccer World Cup.

PPC is the leading supplier of cement in Southern Africa through its eight cement manufacturing facilities and three milling depots in South Africa, Botswana and Zimbabwe -- all of which can produce around eight million tons of cement products each year.

PPC, which competes more favourably with the larger Nigeria's Dangote Cement and Morocco's on the continent, has been looking for new revenue streams across Africa to offset sluggish demand at home.

The company also said it was pursuing a further three opportunities across the fast-growing continent. It recently acquired three aggregate quarries in the country from Quarries of Botswana for P50 million (US$6.8 million).

In a statement, the company said that the acquisition - which comprises three quarries in Gaborone, Francistown and Selebi -Phikwe - is part of its Southern Africa expansion strategy. It already owns the Kgale quarry - situated in Gaborone's Kgale Hills - and which mainly supplies an extensive range of granite products to the civil construction industry. The three new quarries will expand PPC's footprint and make it's aggregates division the largest aggregate producer in Botswana, the company's management has reported.

As a division of the largest cement making company in Southern Africa, PPC Aggregates is one of the main suppliers of quality construction aggregates to the civil construction industry and products for the chemical, metallurgical and agricultural industries.

The acquisition came at a time when construction, which was the highest contributor to GDP growth in the second quarter of this year, is booming in Botswana with many government and private sector sponsored projects currently underway.

The robust growth in the construction sector is riding on the back of a huge investment that government has made into infrastructure development: roads, airports, the P11 billion Morupule power station, dams and other private sponsored development such as property development in the new CBD, Jwaneng mine's Cut8 project, Boseto copper mine in Maun and AK6 in Boteti.

The P50 million investment would see PPC's aggregates division increase its total capacity from three million to about four million tonnes per annum and gain approximately 100 employees.