The ManicaPost
Kudzanai Gerede: Business Correspondent
PPC Zimbabwe has called for a level playing field in the local cement market. Speaking at the commissioning of the new Msasa plant in Harare last week Friday, PPC Ltd chief executive officer Darryll Castle said there was already enough competition among local manufacturers with capacity to support fair industry pricing and quality products in the absence of cheap cement imports.Zimbabwe is believed to be importing about 60 000 tonnes of cement annually and consultations between industry representatives and Government through the Ministry of Industry and Commerce to protect the local producers are yet to yield results.
In May this year, the ministry held a breakfast meeting with cement industry representatives where it emerged that the country was leaking around US$108 million in importation of cement, a commodity which local producers could easily meet its demand.
“Fair competition in the industry allows for companies like us to continue investing in the local economy, ensures the sustainability of the industry.
“Cheap imports have the potential to cause significant injury to the local cement manufacturing industry, including job losses, underutilisation of production capacity and reduced return on assets employed.
“We believe that strong local competition exists, supporting fair industry pricing, quality products and job creation on a sustainable basis,” Mr Castle told the company customers and various stakeholders at the commissioning of the new plant.
The cement producing giant has embarked on an expansion drive meant to double its production output through acquiring a new state of the art plant in Harare with capacity to produce 700 000 tonnes per year with the aim to improve its market penetration in the northern and eastern parts of the country.
PPC Bulawayo plant was having challenges with supplying all parts of the country owing to poor and inefficient transport systems considering the railway liner was facing massive operational challenges.
The plant which boasts of some of the latest technology such as the palletised packaging machine, the first in the country which is an automated machine that packs 40 bags of cement onto a pallet in a unit area within a few minutes will improve efficiency and see the cement producing giant manufacture, a combined 1,4 million tonnes of cement annually with its long established Bulawayo plant.
The newly commissioned plant is one step towards the company’s vision to increase the country’s exports which comes at a time when Government was seized with efforts to widen export products in the wake of international shocks on conventional export items.
However, the company’s country managing director Mr Kelibone Masiyane admits this vision remains constrained as the country is yet to improve its competitiveness on the international and regional markets.
“Zimbabwe is a high manufacturing cost base so this is affecting competitiveness because we have set our sight on exports to Zambia, Malawi and Mozambican markets but it’s still too little to talk about it so far.
“One of our major costs is electricity. We are being charged 15 cents per kilowatt hour here. If you go to Zambia, they charge 6 cents and we are setting up a plant in Ethiopia where they are charging about 3 cents.
“As such competing in other countries will be difficult for Zimbabwe,” said Masiyane.
Since 2014, cement exports have taken a nosedive from 100 000 tonnes to just about 40 000 tonnes in 2015 and currently, industry representatives have highlighted that the sector has not recorded any exports this year owing to lack of competitiveness of the locally produced product.
Industry players say it takes US$150 to produce a tonne of cement locally as compared to an average of US$60 to produce anywhere within the SADC region.
The firming of the US dollar, high tariff charges, cost of water, electricity, labour and transport costs have rendered the cost of the final product uncompetitive.
He however, expressed confidence in the local market as seen by satisfactory uptake of the commodity in a market the company is set to consolidate its dominance.
PPC is the largest cement producer in the country with the new plant expected to catapult production to 1,4 million tonnes per year whilst Lafarge and Sino-Zimbabawe trail with capacity of 450 000 tonnes and 250 000 tonnes annually respectively.
