Regional cement and lime manufacturer Pretoria Portland Cement (PPC) says it has secured $75 million to expand its Zimbabwe operations, with the bulk mainly going to the ongoing construction of a 700 000 tonne per annum cement plant in Harare.
In its overview for 2014, the South African headquartered group said the bulk of the money was supported by business units in the country.
The company has cement manufacturing plants at Cementside in Bulawayo and Colleen Bawn in Matabeleland South.
“Project funding has been secured for new projects in the DRC and Zimbabwe of US$168 million and US$75 million respectively, with limited recourse to PPC Ltd’s statement of financial position only until performance targets are achieved on the DRC project. In Zimbabwe and Rwanda, projects are fully supported by the respective business units in those countries,” said the company.
“In Zimbabwe, construction is under way on a 700 000tpa cement mill in Harare for some US$85 million. Having a modern and efficient mill in the heart of the country will give PPC an added competitive advantage. Project finance of US$75 million was secured.”
The group said it committed R3 896 million capital expenditure last year compared to R1 088 million in 2013, mostly linked to the DRC and Zimbabwean expansion projects with R2 246 million and R1 572 million expected to be spent in the 2015 and 2016 financial years respectively.
The group said Zimbabwe enjoyed a fifth consecutive year of rising cement demand, albeit on a slower growth trajectory than prior years.
“PPC Zimbabwe continued to realise sales volume increases ahead of local industry growth and good progress was made in growing exports to neighbouring countries,” the company said.
Last year the group said it completed extensive upgrades of the Bulawayo plant, upgraded its crusher and kiln at Colleen Baw.
PPC said its expansion project in Harare started in November with the construction of rail line and some earthwork on the site.
“We expect to commission the expansion project towards mid-2016 and we are closely managing key issues such as regulatory approvals and local skills shortages to achieve this.”
The slowdown in economic growth caused by ongoing liquidity problems and high external debt levels will continue into 2015, said PPC in its outlook for the Zimbabwe market, hence it will focus more in expanding exports.-The Source
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