PPC will expand its presence in the South African cement market following the signing of a new memorandum of agreement with Sinoma Overseas Development Company.
The terms of the memorandum of agreement will see the creation of a new integrated cement plant in South Africa’s western cape, worth R3 Billion. The announcement comes after the two companies entered a “strategic co-operation agreement” in July 2024.
The new plant is expected to be completed within the next two years with PPC believing it can fund the new plant from debt facilities.
“South Africa’s cement industry is undergoing rapid change, and we are working on building a stronger and more efficient PPC to entrench our leadership position in the industry,” PPC chief executive officer Matias Cardarelli said.
“Investing in this state-of-the art technology is a key pillar of our “Awaken the Giant” strategy to be able to supply our customers with lower-carbon cement at a more competitive cost, and to deliver value to shareholders.”
The cement plant will be capable of producing 1.5 million tonnes of cement per annum which will increase the existing capacity. The new plant will be constructed at one of PPC’s current sites.
The new plant will feature a fully dedicated solar generation system which will reduce PPC’s coal consumption and reduce the emissions per tonne of cement produced.
“With this new and most advanced energy and environmentally efficient plant in the country, we will be able to supply our customers with lower carbon cement at a more competitive cost,” Cardarelli said.
“It represents a major step in the sustainability of our business moving forward and will play a key role in achieving PPC’s commitment to reduce its carbon emissions and to deliver value to shareholders.”
It is understood that the feasibility study is in an “advanced stage” while in the next three months, PPC and Sinoma will finalise the scope and final assessment of the new plant, the associated turn-key engineer and EPC agreements.
“By substituting existing capacity with a more efficient, environmentally friendly and larger plant, we are securing PPC’s competitiveness in a key market, by delivering to our customers the best value proposition in the region,” Cardarelli said.
“This will better position PPC for sustained profitability for decades to come and will ensure the group’s long-term future. It also represents commitment and support of the national objective of economic growth and infrastructure development. The pursuit of this investment demonstrates the continued confidence in South Africa by the PPC board and management.”
