PPC cautious on cement demand outlook

Pretoria Portland Cement (PPC) says it remains cautiously optimistic regarding the outlook for cement demand in South Africa and Zimbabwe.

Releasing a trading update on Monday, the construction group said cement demand in the Western Cape lagged behind the other provinces and consequently impacted on its South African cement sales in the quarter ended December 2011.

Cement sales for the South African cement industry as a whole in the quarter under review increased by 7% compared to the comparable period in the prior year.

PPC's cement sales in Zimbabwe continued to grow while cement sales in

Botswana declined in line with a general construction industry slowdown in that country.

The company said cement pricing momentum established during 2011 in South Africa, Botswana and Zimbabwe continued into 2012. Administered energy prices remain a challenge for the industry.

Lime sales improved during the quarter on the back of improved demand from exports and the local steel industry. Aggregate volumes in both South Africa and Botswana showed recovery in a very competitive environment.

"Phase 1 of our Western Cape modernisation project, the R280 million upgrade of kiln 6 at De Hoek factory is on track for completion during April 2012. The final EIA report for Phase 2, at our Riebeeck factory, has been submitted to authorities," it said in a statement.

PPC said it continued to focus on opportunities in sub-Saharan Africa.

"Although the global economic turmoil continues, we remain cautiously optimistic regarding the outlook for cement demand in South Africa and Zimbabwe. Current trends in cement demand and prices should result in improved results during the first half of our 2012 financial year," the company said.


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