PPC Zimbabwe, the country’s largest cement maker, said Friday it had seen strong rallies in the first quarter as the Covid-19 scourge appeared to be under control and abandoned projects are now back on track.
Projects were frozen for most of 2020 as the government announced tough lockdowns to tackle the pandemic that turned economies upside down and left a number of victims.
Cement demand collapsed, hurting revenues and volumes in all sectors.
After the lockdowns, nervousness in the construction market was increased by reports of bottlenecks.
PPC CEO Kelibone Masiyane, however, allayed fears, telling Standardbusiness that volumes had rebounded, with PPC topping budgets by 5% in the first quarter.
The company operates a clinker factory in Colleen Bawn near Gwanda and cement mills in Harare and Bulawayo.
“We have seen a phenomenal increase in sales volumes despite the difficult operating environment,” said Masiyane.
“We are talking about 5% above target in the first quarter of 2021 and expect further demand due to an excellent farming season.”
Masiyane said while the Colleen Bawn plant was closed for scheduled maintenance, reports of a larger problem have thrown the business off balance.
This led to fears that domestic cement makers were not well positioned to meet demand, leading to large-scale panic buying.
The PPC chief also noted that the government’s decision to protect domestic producers earlier this year sparked fears that producers would be in trouble.
“The perceived cement shortage may have been triggered by the recent import ban enacted by the government in Legislative Decree 89 of 2021, and also combined with rumors that we had a factory shutdown at Colleen Bawn,” he said.
“First, the government is aware of its role in protecting jobs and the cement industry.
“The land was inundated with cheap and poor quality cement, which from a structural point of view posed a safety risk to the construction industry.
“And the rumors of a breakdown were untrue. Second, our Colleen Bawn facility was undergoing a scheduled maintenance program.”
Masiyane said that after cement makers provided fresh capital to expand capacity and build new facilities, they expected returns that would be difficult to achieve with a flood of imports.
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“Returns are expected, so it is important that we try to cut imports,” he said.
“But I think because of the Colleen Bawn closure, a lot of people panicked and hoarded, which created artificial shortages.
“But I have to say that Colleen Bawn is ready to go.
“I expect cement shortages to be a thing of the past for the next week or so.
“The only challenge after our shutdown is the power supply.
“We spoke to Zesa, the utility company, because we experience daily power outages at our Colleen Bawn facility and these are our most important operations that should run 24/7.
“But unfortunately we have not exhausted the full potential of our system since the shutdown due to these daily interruptions.
“But I have to say we hired Zesa and we’re trying to find a solution together and they’re pretty cooperative.”
Masiyane added, “Typically, before shutting down, you make sure there is sufficient supply of raw materials and cement so that customers don’t really feel like the equipment is being serviced.
“We have had a steady presence in Zimbabwe since 1913 while doing the same annual maintenance without affecting the market in terms of supply.
“So this is something that we have done for many years and continued to perfect.
“In this case, we got an artificial shortage due to a surge in demand from panic buying and hoarding.”