By Alois Vinga
LISTED cement manufacturer, PPC Zimbabwe has projected a 25% increase in cement demand in the local market spurred by government funded projects and rising retail demand.
In an operational update for the twelve months ending March 31, 2022, the company said the local operations continue to perform ahead of expectations.
“For the twelve months ending 31 March 2022, PPC Zimbabwe’s cement sales volumes are expected to increase by 21% to 25% year on year, benefiting from retail demand, increased sales to concrete product manufacturers, and support from the government-funded projects,” said PPC.
The group also predicted a 4% to 8% increase of cement sales across its regional units.
Government has since attributed the increase in cement demand to the sharp rise in housing construction and private sector-led infrastructural development programmes that have pushed demand for Zimbabwe’s cement makers.
The survival of Zimbabwe’s cement makers was in the past threatened by an overflow of regional imports, which precipitated price wars.
However, the disrupted supply chains affected by Covid 19 induced border closures in the past year, saw demand tilting in favour of the local markets.
The developments also come against a background of stabilising inflation and exchange rate volatilities which have enabled locals to push ahead with their long term construction plans.
Records show that the largest demand is not even coming from government projects but housing and the private sector sector.
Cement sector market watchers place the total grinding capacity for Zimbabwe at a combined 39,8 million tonnes annually which outstrips about 23,5 million tonnes required in their markets.
PPC reported that units in South Africa and Botswana cement experienced low single digit growth in cement sales positioning two countries Zimbabwe and Rwanda as the major sales drivers.
“PPC is well-positioned to benefit from growing cement demand in the territories it operates. The group remains focused on improving operational efficiencies to ensure financial sustainability through all demand cycles,” added the company.