Sales volumes of SA’s largest cement maker, PPC, rose by a fifth in October compared with the same period in 2019, as pent-up construction demand continued to take place after the hard lockdown.
PPC said in an operational update on Wednesday that it experienced muted sales in April and May due to Covid-19 restrictions imposed across most of the jurisdictions in which the group operates.
But a strong recovery has been experienced in PPC’s SA and Botswana operations, with double-digit year-on-year growth in cement sales volumes since June.
In the three months from July to September, cement sales volumes increased 20%-25% year on year.
“This trend has continued in October with strong cement sales volumes experienced for the month, up 15% to 20% compared with the same period last year,” the group said.
Many of these sales have been to individual consumers instead of construction companies.
“These increased volumes are primarily retail led, as increases in disposable income due to reduced discretionary spending on other items due to reduced movement, and an increase in income due to reduced interest rates and the various social relief grants continued,” the company said.
PPC said it has also started to experience the positive effect of increased infrastructure spending, which it hopes will carry the strong demand once retail sales volumes return to more normalised levels.
The company’s other African operations were less affected by the Covid-19 pandemic.
Cement volumes sold also showed double-digit growth in June-September compared with the same period in 2019.
For the first half of the 2021 financial year to March, PPC Zimbabwe and PPC Barnet, which operates in the Democratic Republic of the Congo, experienced about 5%-10% volume growth each compared with the prior comparable period.
In July-September, sales volumes in PPC Zimbabwe and PPC Barnet increased 35% to 40% and 20% to 25% respectively, compared with the same period in 2019.
In October there was moderate growth in cement volumes for PPC Zimbabwe at about 5% compared with October 2019, while PPC Barnet has continued to experience strong growth, with cement volumes up 25% to 30% compared with October 2019.
In Rwanda, PPC enjoyed 5%-10% volume growth from April to September, compared with the same period in 2019, and in July-September sales volumes increased 15% to 20% year on year.
October cement volumes have continued to grow — 25%-30% compared with October 2019, it said.
PPC is amid a restructuring programme in which it could ask shareholders for R750m-R1.25bn through a rights issue.
CEO Roland van Wijnen said any capital raise is likely to take place in the first quarter of 2021 and not in 2020.
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