PPC Collen Bawn plant risks shut down Call to ban clinker im­ports

Sunday News (Zimbabwe) - - Business - Pros­per Ndlovu re­cently in Collen Bawn

THE coun­try’s largest ce­ment pro­ducer, PPC Zim­babwe has hinted on a pos­si­bil­ity to shut down its Collen Bawn plant in Gwanda cit­ing pres­sure from cheap im­ported clinker by other pro­duc­ers and smug­gled ce­ment, which frus­trate its oper­a­tions.

The Collen Bawn fac­tory is the back­bone of PPC oper­a­tions in the coun­try re­spon­si­ble for lime min­ing and pro­duc­tion of clinker, a ma­jor raw ma­te­rial in ce­ment man­u­fac­tur­ing. PPC Zim­babwe is part of the four pro­duc­ers of ce­ment in the coun­try that in­clude Sino Zim, Lar­farge and Kwekwe-based Live­touch Ce­ment.

Man­age­ment has since ap­pealed to Govern­ment for pro­tec­tion say­ing un­less mea­sures were put in place to curb cheap im­ports, the gi­ant firm risks los­ing its more than 70 years in­vest­ment at Colleen Bawn. The sit­u­a­tion could also trig­ger loss of jobs and com­pro­mise liveli­hoods for nearly 4 000 peo­ple in the com­mu­nity who de­pend on the fac­tory.

Coun­try man­ag­ing di­rec­tor Mr Keli­bone Masiyane ac­com­pa­nied by PPC In­ter­na­tional MD, Mr Ra­mafoko Mokate and their se­nior staff met In­dus­try and Com­merce Deputy Min­is­ter, Chi­ratidzo Mabuwa, dur­ing a tour of the plant on Thurs­day where they dis­cussed fac­tors that threaten their vi­a­bil­ity and hinted on the pos­si­bil­ity of shut­ting the fac­tory and opt­ing for cheap im­ported clinker.

“The cost of pro­duc­tion is very high in Zim­babwe when com­pared to the rest of the re­gion. Our com­peti­tors are im­port­ing clinker at a cheaper cost and they are jump­ing the pro­duc­tion process. The big­gest chal­lenge here at Colleen Bawn is that we in­cur huge costs pro­duc­ing clinker and be­cause of this there is a risk of clo­sure of the plant and opt­ing to im­port clinker as well,” said Mr Masiyane.

“This whole in­vest­ment is at risk if we take that route. We are say­ing the clo­sure of this plant is a pos­si­ble risk if im­ports are not con­trolled as we will be forced to also im­port clinker from our sis­ter plants in SA if we don’t get pro­tec­tion. This is why we need pro­tec­tion so that the play­ing field is level.”

Mr Masiyane ex­pressed con­fi­dence that the en­gage­ments they were hav­ing with Govern­ment were go­ing to re­sult in fruit­ful in­ter­ven­tions that would pro­tect the firm and avert neg­a­tive ef­fects. He said their ma­jor cost driver was elec­tric­ity at 14c/kWh, which is far above av­er­age re­gional bench­marks at eight per­cent.

He said as a re­sult of high costs, lo­cal ce­ment could not com­pete ef­fec­tively with re­gional pro­duc­ers like Zam­bia which are also ben­e­fit­ing from the Comesa free trade agree­ments.

“We are quite vul­ner­a­ble as a coun­try as we need tem­po­rary pro­tec­tion. We need to stop ce­ment and clinker im­ports as we have ca­pac­ity and this is not unique to Zim­babwe,” said Masiyane.

In her re­sponse Deputy Min­is­ter Mabuwa said Govern­ment ap­pre­ci­ates the strate­gic eco­nomic role of the ce­ment man­u­fac­tur­ing sec­tor and would ad­dress the plight of PPC. She con­curred that while pro­cessed ce­ment was re­moved from the open gen­eral im­port li­cence, con­tin­ued clinker im­ports were hav­ing a neg­a­tive ef­fect on the value chain.

“The long and short of it is that now we have to go and see that all the clinker needed for ce­ment pro­duc­tion is sourced lo­cally. It doesn’t mean any­thing if we im­port clinker and just do the end lev­els,” she said.

“The real is­sue here is about im­por­ta­tion of the main raw ma­te­rial and this is what we are go­ing to look at. Here at Collen Bawn the plant we see here with all the cap­i­tal in­vest­ment, doesn’t pro­duce the end prod­uct but pro­duces clinker, which is the main raw ma­te­rial in the pro­duc­tion of ce­ment. If we al­low clinker to come in it’s as good as im­port­ing ce­ment. So we are go­ing to talk to man­u­fac­tur­ers of ce­ment to make sure that they don’t im­port clinker but source it here and if they don’t have ad­e­quate sup­plies they should source if from within. That’s im­por­tant and we are go­ing to make sure that we re­move clinker from the open gen­eral im­port li­cence.”

Dur­ing the tour it emerged that eight stages of pro­duc­ing ce­ment are done up to clinker level at Collen Bawn with the PPC plant in Harare and Bu­l­awayo only do­ing fin­ish­ing lev­els. The Deputy Min­is­ter also chal­lenged the PPC man­age­ment to en­sure they supplied clinker to ev­ery­body who needs it in the coun­try, in­clud­ing ex­plor­ing ex­ports mar­ket.

In­dus­try and Com­merce Deputy Min­is­ter, Chi­ratidzo Mabuwa (sec­ond from left) with PPC Zim­babwe man­age­ment and se­nior mem­bers of staff dur­ing her tour of the com­pany’s Collen Bawn fac­tory

Newspapers in English

Newspapers from Zimbabwe

© PressReader. All rights reserved.