RISKS AND GROWTH PROSPECTS
Year ahead a test of PPC’s reconstruction
It is likely that 2017 will be a watershed year for SA’s largest cement producer, PPC. Debt has been cut to R5bn from a peak of R10bn, while the 124-year-old group ramps up production elsewhere in Africa. PPC has bet on deriving at least 40% of revenue from the rest of Africa from 2017, outside of its main markets served from SA. CEO Darryll Castle says the group’s recent R4bn right offer means the balance sheet is "reasonably secure". "But this year is a critical year for us," he says. To this end, the company has finished or nearly completed cement plants in Rwanda, Zimbabwe, Ethiopia and the Democratic Republic of Congo (DRC). This adds nearly 4-million tonnes of capacity a year at a cost of billions of rand. The group has also just received a R1bn boost from the close-out of an empowerment transaction. It will use this sum to reduce debt and to fund capital expenditure. Much of this will go into the new kiln project at its cement plant in Slurry in the North West, which will see...
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