Finweek English Edition - - Portfolio Pointers -

AF­TER THE CUR­RENT DE­CLINE in South Africa’s res­i­den­tial home­build­ing sec­tor, PPC is keep­ing its blood pump­ing cour­tesy of Gov­ern­ment’s R600bn in­fra­struc­ture spend, in­clud­ing low-cost hous­ing. The ce­ment man­u­fac­turer has been for­tu­nate to fo­cus on more than one area, so when one per­forms badly the other com­pen­sates for it.

PPC also op­er­ates in an en­vi­ron­ment with a des­per­ate short­age of homes – ce­ment prod­ucts are al­ways in de­mand. PPC said ear­lier this month that “low-cost hous­ing could be the sin­gle largest area of de­mand go­ing for­ward”. So de­mand for ce­ment to build ru­ral and af­ford­able hous­ing is ex­pected to con­tinue as Gov­ern­ment plans to elim­i­nate SA’s hous­ing back­log by 2014.

By then, in­ter­est rates should have pulled back and the world’s economies re­cov­ered from the cur­rent credit cri­sis. If that’s com­bined with pos­i­tive con­sumer sen­ti­ment, a turn­around in the res­i­den­tial build­ing sec­tor plus grow­ing de­mand will cre­ate mo­men­tum for com­pa­nies such as PPC.

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