Cement firm warns public against being ripped off

Dumisani Ndlela, Property Reporter

A CEMENT manufacturer has urged customers to resist high prices triggered by a shortage of cement on the market, saying it expected a glut of the product soon once its Bulawayo-based plant is commissioned. Dealers had hiked prices of cement, particularly for the Portland cement brands whose availability has been affected by a delay in the re-commissioning of PPC Zimbabwe’s Bulawayo plant.
PPC Zimbabwe, a Zimbabwe Stock Exchange-listed subsidiary of South Africa’s Pretoria Portland Cement (PPC), was expected to have commissioned its Colleen Bawn kiln plant, but encountered unexplained delays, forcing a shortage of cement products on the domestic market.
PPC Zimbabwe dominates the domestic cement market alongside Lafarge Cement Zimbabwe, a subsidiary of Lafarge, the French building materials group. The two command a 90 percent share of the local market, with Chinese-controlled Sino Zimbabwe holding the balance of the market share.
The re-commissioned plant will see output increasing 20 percent. PPC had shut down the Colleen Bawn plant to allow for its refurbishment, which resulted in the installation of new machinery.
In a statement, PPC Zimbabwe acknowledged the supply problems created by the delayed commissioning of its plant, but warned customers to avoid being ripped off by dealers, saying the new plant would be commissioned soon.
The plant was finally expected to start running last Saturday in a bid by PPC management to improve supplies on the market.
A statement from PPC said the company regretted the disruption of deliveries to the market, but assured customers “that supplies will return to normal within the near future”.
“We are aware of dealers that are now charging a premium on cement sales. The public are urged to resist these inflated prices as the market will return to normal in the near future,” said PPC.
In its last report accompanying financial statements for the interim period to March 2010, PPC had indicated that it would significantly slow down on planned capital projects because of lower demand. However, the group said it would continue to seek expansion beyond South Africa, Zimbabwe and Botswana.
“The strategy to expand the business beyond its existing geographical boundaries will continue to receive significant management attention,” PPC said.
The company said cement volumes in the six months to March 31 fell eight percent despite surging demand on the Zimbabwean market, which had trebled during the period.
Last year, another cement manufacturer, Lafarge, pledged to increase cement output to 90 percent of installed capacity of 450 000 tonnes this year, after initially raising this production last year to 72 percent, from 62 percent in 2008.
Cement manufacturers significantly suffered a hyperinflationary environment as well as government control on the price of cement, which resulted in a haemorrhage of the construction sector.
The Property Gazette understands, however, that all three cement manufacturers are still battling production constraints, but are nonetheless buoyant due to stability in the local economy, brought about by the adoption of a multi-currency regime last year and the ditching of the domestic currency, which had grossly suffered from hyperinflation.