PPC – Africa’s Leading Cement Supplier
PPC is a holding company for a group of companies that manufacture and distribute cement material and limestone products. PPC can respond well to changing economic and political conditions since it has an excellent portfolio in Sub-Saharan Africa’s markets.
PPC operates with the aim of poverty reduction and sustainability along with better economic growth.
PPC is South Africa’s leading cement supplier and has 11 factories in South Africa, Zimbabwe, Rwanda, Ethiopia, Botswana, and DRC. Construction of a new kiln nine (SK9) in North West Province is also part of the expansion of PPC’s operations in South Africa.
PPC was established in 1892 as South Africa’s first cement manufacturing company. PPC also has stepped into the Ready-Mix sector and has since grown the operation to 26 plants in Southern Africa and Mozambique. These plants have a capacity of producing about half a million tonnes of fly ash.
PPC currently can produce 116mtpa cement, has one lime factory, and two fly ash plants. Along with that, PPC also emphasises carrying out sustainable operations to reduce the impact of manufacturing operations on the environment.
PPC works with an environmental management approach to promote sustainability and reduce the environmental impact of manufacturing operations. PPC considers it its responsibility to ensure that its operations only provide benefits and no harm. Education, Infrastructure, and Enterprise development are all parts of this ideology of PPC on which the company aims to deliver.
PPC works with a vision to provide high-quality material to the services sector and generate maximum benefits for shareholders. At PPC, shareholders, customers, and employees are all teams that work in cooperation towards generating maximum benefits and creating sustainable programmes that produce no harmful impact on the environment.
PPC was listed on the JSE using the symbol PPC in 1910. The general public has 18% to 19% of the shares in the company. Though important, such a small size of ownership is not considerable enough to influence the company’s policies and decisions made by large shareholders.
Institutions own more than half of the company by owning around 61.0% of shares in the company. The top 12 of those shareholders own about 52%, with the largest shareholder Value Capital Partner having 12% of the shares, PPM America, INC owns about 9.97% of the shares, and Wellington Management Group LLP owns 6.97% of PPC shares.
Private Equity firms have the ownership of about a 12% stake, while on the other hand, private companies own 8.9% of the shares.
PPC aims to invest in local partnerships and has been investing in ventures across South Africa.
In 2012, PPC invested 12 Million Dollars in getting 27% shares in Habesha Cement Share Company in Ethiopia.
Apart from that, PPC also looks forward to investing in South African regions where the demand for Cement supply is not met.
PPC Business Strategy
As a leading Cement Manufacturer in South Africa, PPC focuses on both Innovating Technologies and Sustainability and increasing urbanisation. PPC is both purpose-led and performance-driven.
PPC considers customers and suppliers as business partners, which is why they focus on building meaningful relationships and being responsive. PPC also takes care of its employees, who enable the group to have success and creates opportunities for the employees to have the maximum benefit.
Along with that, PPC also ensures to allocate the funds in ways that improve financial performance and generate value for the stakeholders. PPC has invested in property, plants, and equipment by systematic methods to increase growth and generate maximum value. It also keeps a keen eye on all the upcoming opportunities that have the potential of beneficial expansion.
Increasing efficiency and reducing the cost of production is also one of the main strategies of PPC, which is why it constantly works on improving the products to achieve the maximum value from the product
PPC continues to put huge efforts in operating in a more sustainable approach to reducing the impact of operations on the environment, such as air quality, water resources, and carbon footprint. Utilising natural resources is one of the methods of sustainability that PPC is working on.
PPC also works towards creating automated and simplified operations that require less manual effort and reduce the complexity of operations.
PPC Stock Analysis
JSE: The price of PPC shares is currently at 3.45 ZAR. The company has been going through massive declines after the construction industry of South Africa started declining with peaking around 372 ZAR in May 2021, which has been the highest in the past two years. The highest peak in the past five years was 892 ZAR which was in May 2018.
The share price dropped around 17% on April 6th, 2021.
In the past five years, the losses have increased massively at the rate of about 74.3% per year and have been quite unprofitable. The equity returns have also been negative at the rate of -36.07%.
PPC also has a debt of about R4.55b
Due to depression in the economic growth of South Africa, PPC has been going through a crisis which led the company to list one billion shares for sale in 2016. According to Analysts, the performance will continue to have difficulties, and PPC is not a good option for long-term investment.
The debt has also affected the company’s growth and has caused the fresh capital investment to be an absolute necessity. Otherwise, the investors will suffer a huge loss unless they invest more. According to Anthony Clark, who is an analyst at SmallTalkDaily, “If [shareholders] don’t put more money into PPC, they stand to lose what they’ve already invested. You don’t follow your rights and take up new shares. You run the risk of getting diluted to hell.’
Only the investors who are patient enough and have a hope of turnaround may benefit from investing in PPC. Otherwise, the company has been unprofitable.
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