PPC is considering asset sales to improve profitability
The cement maker is looking at options to repatriate funds stuck in Zimbabwe, and plans to reduce its foreign exchange exposure there
Cement producer PPC says it is considering selling off non-core assets as it looks to improve its profitability.
The company said in a presentation posted on its website that it is considering “divesting non-core assets” and is looking at options to repatriate funds stuck in Zimbabwe, which is suffering from a liquidity crisis.
PPC plans to reduce its foreign exchange exposure in that market and aims to boost clinker imports from SA. Its cash balance in Zimbabwe has been reduced to $60m (R862m) due to a debt payment at the end of February.
PPC also said SA’s new carbon tax will probably cost its cement and lime operations between R100m and R120m a year.
Cement imports into SA surged in 2018, and the company was lobbying the government to impose tariffs, it said. However, PPC has still managed to hike prices by 8% to 12% in certain regions, but says the local industry “requires restructuring”.
PPC said in February that it is lobbying government body International Trade Administration Commission (Itac) for the imposition of tariffs to curb the influx of cement imports.
It said at the time that the imports, which jumped 80% between January and November 2018, worsened the subdued consumer environment and gloomy construction sector.
The company said the majority of the cement imports are from Vietnam, China and Pakistan.
Meanwhile, PPC said in its presentation that it wants to have a controlling stake in its Ethiopian business, which had been affected by “political instability and plant inefficiencies”.
However, “the political landscape is expected to improve, with strong projected growth in GDP of 7% to 8%”.