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Strengthening PPC Cement's Position in South Africa's Growing Market

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PPC Cement is the largest cement producer in Southern Africa, holding a 44% market share. With a robust capacity utilization of 85%, the company is poised for growth, driven by increasing demand for specialty cements and significant infrastructure spending in South Africa. The government's ongoing development projects and the upcoming soccer world cup are expected to contribute to a sustained demand for cement. PPC's strategic capacity expansion and potential acquisitions across Africa aim to enhance operational efficiency and market presence.

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Strengthening PPC Cement's Position in South Africa's Growing Market

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Presentation Transcript

  1. Stock Presentation De Eerste Cement Fabrieken Beperkt

  2. Cement-Value Chain

  3. Cement –Key Growth Drivers • GDP Growth • Infrastructure Spending • Energy Cost Electricity and Fuel • Freight Cost • Interest rate • Capacity Utilization of the plants • Customer Needs: Demand is increasing for specialty cements and concretes that meet particular customer needs

  4. Country Market Attributes • SA is endowed with physical and economic infrastructure, natural mineral and metal resources, a growing manufacturing sector . • The JSE Limited is the 17th largest exchange in the world by market capitalisation (some R3.6-trillion as of September 2006) • SA rated 'low' for political risk . • Inflation rate around 5% in 2006. • Industrial Production Growth rate 7.1%. • Electricity Production 227.2 billion. Consumption is 207 billion. • Manufacturing 20% of GDP (2006). • Construction 2.5% of GDP. • Cement Demand increased by 11% in 2006.

  5. Country Market Attributes

  6. Country Market Attributes-Projections Source: Economist

  7. Distinctive Competence-PPC • Largest cement company in southern Africa with 44% market share. • Operate some of the largest lime plants in the world-backward integration. • Good Capacity utilization around 85%. • Overall winner in the Deloitte/Financial Mail “Best Company to work for- 2005 survey. • Meet all legislated emission level requirements and further reduce emissions -working towards Kyoto protocol.

  8. Product Segmentation Revenue: Cement (83%), Lime(11%), Packaging(6%)

  9. Geographic Segmentation Revenue (By geography) : South Africa (95%) , Other countries(5%) Plant Location & Distribution Export Destination

  10. Operating Performance Yearly Comparison Quarterly Comparison

  11. Financial Performance-PPC Yearly Comparison Quarterly Comparison

  12. Financial Performance-PPC Yearly Comparison Quarterly Comparison

  13. Stock Performance-PPC 1 Month 6 Months 3 Year

  14. Stock Performance-Comparison 1 year(normalised)

  15. Peer Group Comparison-PPC

  16. Portfolio Position-PPC

  17. Future Growth Strategy-PPC • Capacity expansion:-PPC has announced two additional projects to increase capacity at a total cost of R3bn. These will run concurrently with the Batsweledi project, which is expected to be commissioned in 2008. • Acquisitions:-PPC looks for acquisition and expansion of plants in other African countries in order to cut transport and export overhead. • South Africa government has taken a lots of infrastructure development project and along with the soccer world cup will keep going the demand for cements the future outlook of the company is quite strong.

  18. Recommendations-PPC Increase position in PPC.

  19. Thank You

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