PPC secures $200m for its second plant in Zimbabwe

Published: 10 June 2013

PPC Zimbabwe, the country's largest cement producer, says it has secured US$200 million to build a second plant in Mount Darwin.

Chief executive Mr Zak Limbada said drilling was in full swing and would be completed in the next two months. Thereafter, the company would identify a site where a mine and the plant would be constructed.

"We have secured US$200 million for the projects but I cannot disclose the source at the moment," said Mr Limbada. "Drilling is ongoing and we hope to have sample results (of limestone) in the next two months. With the permission of various regulators, we are hoping to commence the project soon after."

In November last year, PPC announced plans to set up its second plant in Mt Darwin, about 160 kilometres northeast of the capital with annual capacity on one million tonnes.

This will double the production capacity at its plant in Bulawayo.

Zimbabwe's cement companies have a combined annual capacity of 1,6 million tonnes. Larfage and Sino Cement produce 400 000 and 250 000 tonnes respectively.

PPC yesterday gained US10c to US280c on the Zimbabwe Stock Exchange. Since the beginning of the year, its share price has risen by US79c from US201c, making it one of the big gainers on the ZSE. PPC is among heavyweight shares that have been driving the market since trades began on January 2.

Analysts believe that the need to plug infrastructure gaps in Zimbabwe will drive cement demand this year and beyond. They said local cement companies were better positioned to benefit the rising domestic demand for cement.

The growth being registered by the mining sector, the major driver of the economy, is likely to benefit the construction industry.

PPC has already complied with the country's indigenisation laws after it disposed of 29,6 percent stake to indigenous Zimbabweans. The company also donated seed capital of US$3 million to Umguza and Gwanda.

Under the scheme, Umguza and Gwanda received 5 percent shareholding apiece, an employee ownership trust got 5 percent, the National Indigenisation and Economic Empowerment Fund received 9,7 percent stake while strategic indigenous investors got 4,9 percent shareholding of the company.

Before that transaction, PHL was 21,4 percent owned by indigenous Zimbabweans.
- TH