HARARE - PPC Zimbabwe’s operational performance is being buoyed by increased infrastructure projects in the country, a company top official has said.
Njombo Lekula, PPC Zimbabwe managing director, told South African investors recently that there is a renewed focus by government to revamp the nation’s infrastructure that deteriorated in the last decade.
“What is opening up now is private sector participation … in power generation. Government has come to the realisation that the only way to progress is through foreign direct investment — and to become investor friendly,” he said.
Some of major multi-million dollar infrastructure projects taking place in Zimbabwe include the refurbishments of the Kariba Dam wall, construction of Kariba South power plant and Plumtree-Mutare highway construction among others.
The latest development comes as the Zimbabwe Stock Exchange-listed cement manufacturer’s parent company — PPC — is spending $200 million on expanding its production facilities in the country to meet increasing demand.
Industry experts say Zimbabwe’s cement market evolves from mostly cash-in-hand sales for home building and renovation to renewed maintenance spending on national infrastructure.
According to PPC Zimbabwe, the new Harare plant will cost about $86 million and it should be up and running in the middle of next year.
The group is making the investment despite using only about 70 percent of overall capacity at its existing PPC Zimbabwe operations.
These produce about 700 000 tonnes of cement per annum.
Despite the economic situation in Zimbabwe slowly deteriorating due to low aggregate demand and a biting liquidity crunch, the country has witnessed increased construction activity — both on large and small scale basis.
This has seen the country’s three major cement manufacturers that include Lafarge and Sino-Zimbabwe bracing against increased competition, which could challenge their market position in the country and the region.
Statistics from Treasury indicate that Zimbabwe needs at least $30 billion — an amount at least twice more than its gross domestic product — to revamp its aging and dilapidated infrastructure.
“ZimAsset identifies critical infrastructure projects, estimated to cost over $30 billion, to be implemented over the plan period in order to achieve the targeted 7,3 percent average economic growth,” read part of a document titled Key Principles of Joint Venture Bill.
“The plan, however, recognises the limitations of mobilising public sector funding in support of projects and proposes investment vehicles such as joint ventures to leverage on private sector support,” added the Bill.