PPC restructuring boosts interim growth

Cement and building materials group Pretoria Portland Cements has reported a significant improvement in its interim performance, with revenue growing by 20% to R5.1 billion and basic headline earnings per share up by 83% to 55 cents per share. CEO Roland Van Wijnen shared insights into the company's success and growth prospects during a recent interview with CNBC Africa. Van Wijnen attributed the positive results to an increase in cement volumes across all markets where PPC operates. He mentioned that the growth in volumes was driven primarily by demand, with additional capacity available to meet any further increase in demand. In South Africa, cement volumes increased by 5% compared to 2019, in Zimbabwe by 30%, and in Rwanda by 10%. Van Wijnen expressed optimism about the company's outlook in Rwanda, citing the government's investment in infrastructure projects such as schools and a new airport. He highlighted the positive impact of these projects on cement demand and anticipated further growth in related infrastructure and housing projects. PPC's presence in Central and Eastern Africa, particularly in Rwanda, positions the company well to capitalize on the region's growth potential. With the recent restructuring, the company remains focused on key markets like Rwanda, where significant opportunities for expansion exist. Van Wijnen emphasized that Central and Eastern Africa remain growth regions with substantial infrastructure development opportunities. Despite the challenging economic conditions in Zimbabwe, PPC has seen strong demand for cement in the country. Van Wijnen noted that the high level of investment in Zimbabwe, both from the government and private sector, has contributed to the company's profitability. Additionally, projects like the Harare-Beitbridge Highway have provided growth opportunities for PPC in Zimbabwe. In South Africa, PPC faces competition and challenges from imported cement products, which threaten the local manufacturing sector. Van Wijnen highlighted the importance of fair competition and urged the government to address dumping practices from countries like Vietnam. While the recent government designation is a positive step, more needs to be done to protect local manufacturers and ensure a level playing field. Van Wijnen also touched upon the pricing environment in South Africa, noting that pricing power is not solely determined by inputs but also by healthy competition among existing players. He emphasized the importance of increasing capacity utilization to mitigate cost inflation and enhance efficiency. Overall, PPC's interim results reflect a positive growth trajectory driven by increasing cement volumes, strategic investments, and a focus on key markets. The company's strong performance in challenging market conditions highlights its resilience and potential for further expansion in the region.