President hails PPC’s compliance
PRESIDENT Mugabe has hailed Port Pretoria Cement (PPC) Zimbabwe for its compliance with indigenisation laws while commissioning the cement giant’s US$82 million dollar state-of-the-art Msasa plant in Harare recently.
The highly efficient cement producing plant located in newly established Sunway City industrial park, a Special Economic Zone (SEZ) has been largely viewed as the first major project that has finally set rolling the industrialisation agenda in the SEZs following its completion late last year.
Special Economic Zones are investment hotbeds that have been identified by Government which enjoy incentives such as tax holidays and import duty exemption of certain materials feeding into the industries in these areas among other attractions in a bid to boost foreign investment into the country.
To date, PPC Zimbabwe has fully complied with the indigenous laws governing 51 percent ownership of foreign companies operating in the country including investing in community ownership trusts.
Speaking at the commissioning of the plant, the President said the cement producer has demonstrated that the indigenous law is meant to protect investment in the country contrary to negativity generally encompassing the legislation.
“In 2012 PPC complied with the 51 percent indigenous policy legislation making it one of the first companies to comply. It has demonstrated that the policy guarantees the protection of investment.
“PPC has allocated 10 per cent equity to community share trust which are Gwanda and Umguza community share ownership trusts. It has allocated 9,7 percent to employees, with a consortium of local business people allocated 4,9percent and the National Indigenisation Empowerment Board (NIEB) getting 9,7per cent,” he said.
To date the company has paid a total of US$3 million to community share ownership trusts and last year alone, it paid US$ 200 000 in dividend.
Analysts have welcomed the company’s continued support of the Government’s poverty alleviation strategies by empowering local communities as investing in the company’s core business alone has limited benefits to the host country especially at a time when modern industries are highly mechanised hence making huge profits with very low employment uptake.
For instance, the multi- million dollar production plant which boasts of bulk-handling and latest palletising technology that packs 40 cement bags per minute is expected to boost efficiency yet it employs just above 80 people calling for the need to support income generating projects to communities.
With the 700 000 tonnes per annum plant now in full gear, PPC has set its eyes on regional export markets having seen its combined annual production with two of its other production plants, Collen Brown in Gwanda and Bulawayo plants producing over 1,4 million tonnes per annum against a national demand of just above 1 million tonnes.
This is despite the fact that there are other players like Lafarge and Sino-Zim with capacity of 450 000 tonnes and 250 000 tonnes annually respectively.
“We have the capacity to meet local demand and we continue to ask Government to restrict cheap imported products to help us sustain viability domestically as we all know we are in a high cost producing environment,” PPC Zimbabwe managing director, Kelibone Masiyane said.
“If you look at this plant, it’s highly automated. We are trying to improve efficiencies and productivity. We have a similar plant in Bulawayo but you will find that the number in terms of manning levels is much less. As a company we are on a cost containment drive and that will make us competitive in the region,” he added.
He called on the Government to ensure that the cost drivers across the entire chain of production were aligned with regional standards to ensure local producers remained competitive.
Currently the company is getting electricity at a tariff of 14 cents per kilowatt-hour when in Zambia electricity was charged at 6 cents per kilowatt-hour.
This has made the company’s local plants less competitive as the company continues to expand its regional footprint by commissioning new plants in Rwanda and Ethiopia before year end.