PPC to build factory in cement-hungry DRC

LISTED cement and lime producer PPC has signed a memorandum of understanding with the Barnet Group, its local partner in the Democratic Republic of Congo (DRC), to build a $230 million (R2.3 billion) cement factory in that country.

The signing of the memorandum of understanding forms part of PPC’s strategy to increase its turnover from outside South Africa from 22 percent of the total now to 40 percent by its 2016 financial year.

Ketso Gordhan, PPC’s chief executive, said yesterday that the greenfield project in the DRC included the construction of a 1 million-ton-a-year cement factory and associated quarry.

The plant would take about 24 months to complete.

PPC previously confirmed the company was finalising an agreement with Chinese engineering, procurement and construction company Sinoma International Engineering to build its cement plants in the continent.

Located 20km from Kimpese in the western DRC, the plant will ensure easy access into the country’s main markets.

Gordhan said there were existing cement manufacturers in the region, but the market was severely undersupplied.

At present, the DRC’s annual per capita consumption of cement was 16kg, which was the lowest in Africa. The South African average was 240kg and the global average was 400kg.

“This investment is another of PPC’s commitments to invest in sub-Saharan Africa and we are very confident about the DRC. “We look forward to a growing contribution and partnership with the DRC in the years ahead,” he said.

To better understand the market, PPC has partnered with local entrepreneur Jean Saidi Bamanisa, the chairman of the Barnet Group and the honorary secretary of the Federation of Congolese Companies. He is also governor of the country’s Oriental province.

The DRC government has put emphasis on infrastructure projects and South African-based companies have been encouraged to explore the opportunities offered by its new special economic zone.

PPC has made significant progress with its Africa strategy. Last year it acquired a 27 percent stake in the Habesha Cement Share Company in Ethiopia for $12m and 51 percent of Cimerwa of Rwanda for $70m.

The construction of the $130m Habesha cement plant is scheduled to begin this month, with production starting in October 2015 to coincide with the commencement of production at its Rwanda plant.

PPC has also received its Zimbabwean indigenisation certificate, which opens the way for it to expand its operations in that country.

In May this year, PPC confirmed that it planned to establish a new 1 million-ton-a-year cement plant in that country, with construction due to commence this year if the feasibility study was positive.

PPC shares lost 2.42 percent to close at R30.20 yesterday.