Modern Quarrying Quarter 1 2021

CEMENT

The modernised 600 000 tonne per year CIMERWA plant is strategically located, positioning the company at the centre of Rwanda’s inland growth.

impacted by the hyperinflationary environment, unstable power supply and shortage of foreign currency, PPC continues to secure large infrastructure projects in hard currency. In terms of projects, PPC Zimbabwe is supplying almost 80% of the government projects underway in the country. For example, the company supplied the Gwai-Shangani dam project, where at least US$122-million has already been spent under the Public Sector Investment Programme to address perennial water challenges in Bulawayo, Zimbabwe’s second largest city. The project was initially scheduled to be completed in December 2021, but is now stalled by the outbreak of COVID-19. Elsewhere, PPC is also supplying the Zimbabwe government’s 600 MW Hwange Power Station expansion project. The US$1,5-billion project, being carried out by Chinese firm Sinohydro, entails the addition of two power generating units, units 7 and 8, to the existing six units that were commissioned between 1983 and 1987. PPC, adds Ramafoko, is also supplying the Beit Bridge-Harare- Chirundu road project. The 971 km project involves the dualisation, upgrading and tolling of the country’s major highway. The estimated completion date is 2022 and the projected total project cost is US$2,7-billion.

A key driver of the cement market in Rwanda is a deliberate move by the government to roll out infrastructure projects.

outside South Africa. “If you look at the segmental analysis of our results for FY20, you will see that out of the R1,6-billion total EBITDA, approximately R1-billion was generated from our international markets. The bulk of it actually came from our Zimbabwe business, followed by Rwanda and the DRC,” explains Ramafoko. While PPC’s cement volumes in Zimbabwe declined by 15% to 20% in a market that contracted by a similar margin, revenue increased 29% to R1,9-billion, while EBITDA grew by 53% to R707-million, contributing almost 70% of group EBITDA. Commenting on why Zimbabwe is seemingly resilient in the face of tough economic conditions prevailing in the country, Ramafoko says the revenue increase was buoyed by stable realised prices and cost reduction. “One of the key factors driving our international business is stable pricing in some of these markets. Apart from Ethiopia, which is very similar to South Africa in terms of cement pricing, the other three countries – Zimbabwe, Rwanda and the DRC – are boosted by good cement prices, although we have much lower utilisation,” explains Ramafoko. Apart from pricing, Ramafoko says these businesses are in developing markets. For example, while trading conditions in Zimbabwe continue to be

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MODERN QUARRYING QUARTER 1 - 2021