SOUTH Africa-based Pretoria Portland Cement (PPC) has said it is considering selling a stake in its Zimbabwe subsidiary to comply with the country’s empowerment laws.
PPC is the majority shareholder in Zimbabwe Stock Exchange (ZSE) listed Porthold which the South African company acquired in 2001.
However regulations published by the Zimbabwe government earlier this year now require foreign-owned firms to sell at least 51 percent of their shares to locals.
PPC Chief Executive Paul Stuiver told Reuters the group would consider selling a stake in the Zimbabwe unit to local investors to comply with the empowerment regulations.
Meanwhile the group said growth in Zimbabwean cement demand for 2010 exceeded 100 percent although sales volumes in the second half of the year were down compared with the first half.
"Zimbabwe is steaming ahead again, our operations are doing very well. We have a capacity there of 850 000 tons per annum, currently running at around 450 000, so still a lot of room to manoeuvre," he said.
The country’s economy has been on a recovery path since the coalition government took office with regional analysts, Imara projecting growth could top 10 percent in 2010 while the International Monetary Fund has projected a budget surplus.
However, PPC lamented the adverse impact of power supply interruptions.
“Operations during the second half were affected by extensive electricity load-shedding and the clinker cooler upgrade at the Colleen Bawn factory taking longer than anticipated.
“As a result, clinker needed to be imported from South Africa in an attempt to keep the market supplied, although this had a negative impact on operating margins in the second half,” the company said in a statement accompanying its latest results.
PPC said a new mill had been successfully commissioned at its plant during the year.
“The Hercules vertical roller mill was commissioned during the year, and is achieving a significant reduction in electricity consumption at the plant. The project’s final estimated costs remain within budget of R700 million,” the statement added.
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