PPC considers expansion and possible sell-off in DRC

PPC Ltd’s CEO, Johann Claassen, has vowed to boost liquidity and extend debt maturity and he’s eyeing future expansion for the company in east and west Africa.

New investment would follow a ZAR12bn (US$995m) outlay on five plants in the past five years, which took PPC into countries such as Ethiopia and the Democratic Republic of Congo (DRC). All are now in operation and generating cash, said Claassen, allowing the company to consider new facilities.

“We had to steady the ship and make it sustainable,” he said in an interview with Bloomberg. “Now we need to get a new pipeline of projects.”

East Africa is a particularly fast-growing region, while an abundance of projects in Côte d’Ivoire implies a high demand for cement in the West African country, Mokate Ramafoko, PPC’s head of Africa operations, said in the same interview. Ramafoko said Kenya had a shortage of clinker plants and Uganda also looked promising, with a new project coming up. 

Meanwhile, there is an oversupply of cement in sub-Saharan Africa’s largest country, and PPC is in talks with China National Materials Co (Sinoma), about selling a stake in the Congo operation.

“They are quite amenable in taking a majority stake,” Mr Claassen said, adding that the outcome may depend on merger talks between Sinoma and local rival China National Building Material Co, which would create the world’s largest cement maker. “We are not married to Congo, but we would need a fair price for what we invested,” he added.