PPC Ltd. (JSE:PPC) has cautioned against the slow pace of infrastructure development which could result in more losses of jobs and value for companies in the construction and feeder sectors such as cement and concrete.
Infrastructure development has been identified as a key pillar for stimulating economic growth and job creation. However, a pandemic-induced economic depression along with South Africa’s fiscal constraints and a lacklustre approach to resolving the infrastructure backlog threatens to derail the economic recovery promise.
“The social and economic difficulties facing South Africa demand exceptional and accountable leadership from all sectors. We need leaders who are motivated by action rather than talk in tackling increasing joblessness and the country’s stagnant economy,” said Njombo Lekula, Managing Director of PPC Southern Africa.
Lekula was speaking at the DEVAC INFRASFUTURE 2021 conference in Cape Town. The exclusive two-day annual conference brings together public and private sector decision-makers – including multinational executives, international investors, African governments and various other institutions – to address challenges facing the African infrastructure sector.
Lekula said the industry noted with great anticipation the government’s commitment to invest in infrastructure development, including the repair and maintenance of existing assets.
“Notwithstanding government’s leadership role in this aspect, government cannot do it alone. It is time to forge stronger partnerships to resolve funding challenges and other related issues that are delaying the realisation of our economic goals. It is also urgent that we have more agile and pro-growth policies and regulations that will protect our sector from the harmful effects of imports, whilst enabling accelerated growth of SMMEs,” said Lekula.
The cement and concrete industry was already limping along prior to the Covid-19 pandemic due to a torpid economy, weakened construction sector and the unmitigated flood of cheap imports. The industry depends on natural resource inputs – 97% of locally-sourced inputs including limestone and ash. Cement production is capital-intensive and the industry benefits state owned enterprises (SOE) such as Transnet and Eskom in related service provisions.
“It is vital that our policymakers and regulators appreciate the opportunity that is lost to imports. The 1 million tons of cement that is imported to South Africa is the equivalent of a fully integrated cement plant – such as PPC’s De Hoek factory in the Western Cape, which employs about 300 people, running at an estimated value of R900-million in annual operational spend. The bulk of that spend would cover workers’ salaries and much needed revenue to state-owned companies, Eskom and Transnet as well as many SMMEs and local service providers,” said Lekula.
“We need a construction industry master plan to grow and protect the local cement industry and other elements of the value chain. We need movement on the infrastructure build and maintenance programme, and swift action in local content designation for all SOE & government infrastructure projects to sustain and create more jobs in the sector,” added Lekula.
While calling on policymakers to move with speed, PPC has continued to demonstrate confidence in the country’s growth prospects by investing in SMME development, recommissioning mothballed plants and expanding health care access to communities in which the company operates.
“We will continue to forge strong partnerships with all stakeholders and communities to improve the quality of life of all South Africans. In this regard it is imperative to explore Alternative Building Ways, that will include and benefit communities in their housing and infrastructure building initiatives,” concluded Lekula.
About PPC Ltd
PPC is an iconic material and solutions provider of quality and consistent cement, aggregates, metallurgical-grade lime, burnt dolomite, limestone, ready-mix and fly ash. We also provide technical support to our customers. PPC’s story stretches back over 128 years to where we were first incorporated on the outskirts of Pretoria in 1892. As the first cement plant in South Africa, we have established ourselves as a resilient organisation by adapting to ever-changing economic, operating and political environments. This Sub-Saharan brand continues to grow beyond South African borders into Botswana, Zimbabwe, Democratic Republic of Congo and Rwanda where our footmark extends. We are proud to be a leading provider of quality building materials and solutions to empower people to experience a better quality of life.
