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PPC Zimbabwe witnesses 5% decline in domestic sales

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World Cement,

Cement manufacturer PPC Zimbabwe recorded a 5% y/y fall in domestic sales for the first five months of 2014, compared to the same period a year earlier. The decline was mainly attributed to a decrease in the number of housing projects in the country.

Njombo Lekula, Managing Director of PPC Zimbabwe, told local press that there has been significant growth in residential construction projects over the last few years, which resulted in increased demand for cement. However, the sluggish economic climate has had an impact on domestic house building.

For this reason, the company is planning to expand its sales network to neighbouring countries. However, the surrounding markets have also been suffering from unstable and depreciating currencies. Lekula noted that Mozambique, in particular, has a very competitive market due to imports from the Far East. The company are also looking into the potential of the Zambian market; however, logistics costs and the fluctuating price of the Kwacha have posed a challenge.

Despite a current lack of domestic demand for cement, the company intends to start building a US$200 million cement facility in the northeast of Zimbabwe in 2014. Furthermore, PPC has started construction of clinker grinding plants near Harare and Tete in Mozambique. The new projects are expected to increase capacity to 1.2 million tpa from the current 760 000 tpa.

Edited from various sources by Rosalie Starling

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