PPC Ltd. (PPC), South Africa’s biggest cement maker, plans a new $200 million plant in Democratic Republic of Congo, a net importer of the material, as the company expands in sub-Saharan Africa.
The plant, with a production capacity of 1 million metric tons, will be close to Kinshasa, the capital, PPC’s Chief Executive Officer Ketso Gordhan said in a phone interview from Johannesburg today. “The country has requirements of about 3 millions tons a year and imports at least 1 million tons.”
PPC is expanding in new countries to boost income amid tougher competition in South Africa. The Johannesburg-based company will have three new plants operating in Congo, Rwanda and Ethiopia by the end of 2015, expanding capacity to as much as 11 million tons from 8 million tons. The company plans to tap the capital market for a further 650 million rand ($69.5 million) after an initial auction of about the same amount in March, according to Gordhan.
Construction of the new Congo plant will start by the end of 2013 in partnership with China’s Sinoma International Engineering Co. (600970), Gordhan said.
PPC’s earnings for the fiscal year ending September 2013 will be “very similar” to the prior period, he said. The company said today that profit dropped 20 percent in the first half through March 31 on costs associated with Zimbabwe’s ownership laws.
PPC shares declined 4.1 percent to 33.33 rand by 12:38 p.m. in Johannesburg, the biggest intraday fall since April 15. The stock has weakened 3.6 percent this year, compared with a 5.4 percent rise in the 166-member FTSE/JSE Africa All Share Index.
By Kamlesh Bhuckory - May 16, 2013 12:42 PM GMT+0200. (via bloomberg)
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