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The facility will have a production capacity of 1.5 million tons of cement and run on a solar generation system.
PPC Ltd today announced on SENS that the JSE-listed cement and building materials manufacturer has signed a memorandum of understanding to build a new R3 billion cement plant in the Western Cape.
The construction will be in partnership with Sinoma, a Chinese cement manufacturer, following a cooperation agreement between the entities in July last year.
The announcement of the new state-of-the-art plant comes amid signs that the South African construction industry is poised for significant growth, with more than R300 billion earmarked for public infrastructure projects.
“This new plant will have the ability to offer an enhanced value proposition to both existing and new customers across the Western, Eastern and Northern Cape regions,” notes PPC.
The plant will have a production capacity of 1.5 million tonnes of cement, and will replace and increase existing capacity. It will have the latest technology, including a solar power generation system.
PPC notes that the feasibility studies for the plant have reached an advanced stage. Construction is expected to begin in the second quarter of this year and the plant will be commissioned by the end of the year.
PPC’s existing plants in the Western Cape will continue to operate throughout the construction and commissioning process, providing financing support and a smooth transition.
Based on current analyses, management believes that the new plant strongly meets all of PPC’s capital allocation criteria.
“The funding structure is being finalised, but management believes the new plant can be financed from debt facilities within PPC’s current twice net debt to Ebitda covenant. This will be supported by cash generated by PPC’s existing operations during construction and a milestone payment structure agreed in principle with Sinoma.”
The new plant technology is expected to significantly improve energy efficiency, reduce coal consumption, and reduce carbon emissions per ton of cement. This will reduce production costs and help increase PPC’s competitiveness and profitability.
Matias Cardarelli, CEO of PPC says “This changing market dynamic urgently requires modern and cost-effective assets and environmentally conscious cement producers.”
“This represents a major step in the sustainability of our business moving forward and will play a key role in achieving PPC’s commitment to reducing its carbon emissions and delivering value to shareholders.”
Tertuis Simmers, Western Cape MEC for Infrastructure, commended PPC’s decision to open the new plant in the province.
“I am very pleased with PPC’s decision … My department and I have had many connections with PPC to showcase our successes and plans for the future, and it is encouraging to see that private companies such as PPC see the Western Cape government as a reliable partner.”
The provincial government has allocated R9,1 billion for public infrastructure projects for the 2025/06 financial year. The provincial cabinet also recently endorsed the draft Western Cape Infrastructure Framework 2050, which envisages infrastructure projects. Among other things, this will enable the province to withstand the pressures of climate change.
PPC shares solidified by more than 1,47% in early morning trading and were trading at R4,82 at around 10:00.
SOURCE:PPC to build a state-of-the-art cement plant in the Western Cape – Volkskrag News
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