With the home DIY boom well behind SA consumers and producers, Roland van Wijnen, CEO of cement giant PPC, speaks to Business Day reflecting on his two-and-a-half years at the helm, the viability of plans to go green and what opportunities PPC is eyeing.
Can you reflect on your journey since joining the cement major in 2019?
It’s been a bit of a roller-coaster. When I arrived in October 2019, nobody knew that there was a global pandemic on the horizon.
In DRC we knew we had extended ourselves in that situation but what I didn’t know at the time that I started was the depth of that problem, which turned out to be quite significant for PPC in the first year and a half of my tenure.
We are on a much firmer footing now but there have been moments in the midst of the crisis that I thought it cannot be that a company this iconic with 129 years in business is going under while I’ve just taken control, so, to be frank, it was a bit stressful.
One-and-a-half years of the time I have been here has been in absolute crisis mode and it’s only the past year that we are trying to properly apply our minds to say what is this company going to look like in the next 100 years.
Speak to us about some of the challenges and opportunities cementers are grappling with?
There is still a significant backlog in housing solutions and water infrastructure, while there are opportunities from renewable energies such as wind farms which are set to be built.
Where we see other opportunities is for us to reduce our carbon footprint which means, for example, replacing coal that we currently buy by using waste streams.
What a lot of people don’t know is that a cement plant that burns the limestone to produce cement is actually ideal to burn a lot of waste including municipal waste like plastics, tyres, residue oil or medical waste because the way the kiln works is that it has an ideal temperature to incinerate and has no negative impact on emissions.
A lot of the waste in SA ends up in landfills, and for us to use that waste, the only thing needed is to increase the prices significantly for landfilling so that it is no longer economically attractive and it becomes more attractive to allow us to make investments to prepare the waste material and feed it into our kiln.
We have a carbon challenge in the cement industry and we need to think about the fact that in the next 100 years we might be building with different products than today.
We are starting to dedicate more management intention, time and focus, which will be followed by financial resources, into other types of businesses that are linked to the building space but not directly involved in cement.
How realistic are PPC’s decarbonisation targets and what is the economic incentive?
Of course everyone wants you to commit to being net-zero by 2050, which is sort of the newest slogan. We have refused as there are too many unknown variables for us to be able to commit. And secondly, by the time it is 2050 and you want to hold us accountable, we, the people who made the promises, are long gone and retired anyway.
From 2020 to 2025 we made a commitment to reduce our carbon intensity by 10%. Some people say that’s not very challenging but our view is that it’s doable and we can be held to account as we will make it happen.
We have projects in place up until 2025 that will cost R664m in capital expenditure. Each of these projects is value-creating. For example, if we feed tyres into our kiln in the Western Cape; we have to buy less coal which we truck all the way from the coal mines in the province.
We are very comfortable that until 2025 all these projects will happen because we have the money, we know the technology and it will actually be a financial benefit on top of the CO2 benefit.
The next step from 2025 to 2030 will get us to a fall of 27% of emissions, which is doable with certain solutions in place such as bringing waste into our kilns. However, that is not entirely dependent on us, as it also depends on the regulatory environment.
What is next for PPC?
We’ve taken out cost, we’ve been able to increase prices to partially deal with cost inflation that we have suffered and we are in a much stronger place. And maybe, for a while, we’ll just become a little bit of a boring company.
Don’t forget that we haven’t paid dividends to our shareholders for a long time and they have been very patient. So we need to think about that as well and at some stage just put our heads down and make sure that we give them a return on their investment.
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