PROFILE PPC
Leading PPC’ s transformation
MATIAS CARDARELLI
Matias Cardarelli, CEO of PPC since December 2023, is leading a bold transformation to strengthen the company’ s position in the cement industry. Under his guidance, PPC is rolling out the“ Awaken the Giant” strategy, focused on driving profitability, sustainability and competitiveness. A key part of this vision is a R3 billion investment in a state-of-the-art cement plant in the Western Cape.
The plant, slated to begin construction in 2025 and be commissioned by 2026, will produce 1.5 million tonnes of cement annually, incorporating advanced technology to enhance energy efficiency, reduce coal consumption, and lower emissions.
“ South Africa’ s changing cement market dynamic urgently requires modern and cost-efficient assets, and environmentally conscious producers. At the heart of our‘ Awaken the Giant’ turnaround strategy is the active pursuit of strategic opportunities and projects to ensure that we are successful in a more competitive future market context,” says Matias Cardarelli, CEO of PPC.“ With this new and most advanced energy and environmentally efficient plant in the country, we will be able to supply our customers with lower-carbon cement at a more competitive cost. It represents a major step in the sustainability of our business moving forward and will play a key role in achieving PPC’ s commitment to reduce its carbon emissions and to deliver value to shareholders.”
While the feasibility studies for the plant have reached an advanced stage, over the next three months the parties will finalise the scope and final assessment of the new plant, as well as the associated turn-key engineer, procure and construct(“ EPC”) agreements. Subject to PPC’ s board approval, it is anticipated that the construction of the new plant will start in the second quarter of 2025 and will be commissioned by the end of calendar year 2026. The existing plants in the Western
Cape will continue to operate during the construction and commissioning process, thereby providing funding support and a smooth transition.
Based on analyses conducted to date, management believes that the new plant robustly meets all PPC’ s capital allocation criteria. The funding structure is currently being finalised, but management believes that it can fund the new plant from debt facilities within its current two times net debt to EBITDA covenant. This is support by cash that will be generated by the existing operations during construction and a milestone payment structure agreed in principle with Sinoma.
“ By substituting existing capacity with a more efficient, environmentally friendly and larger plant, we are securing PPC’ s competitiveness in a key market, by delivering the best value proposition to our customers in the region,” explains Cardarelli.“ This will better position PPC for sustained profitability over the coming decades and will ensure the group’ s long-term future. Furthermore, it represents commitment and support of the national objective of economic growth and infrastructure development. This investment also reflects the continued confidence of the PPC board and management in South Africa ' s potential.”
The partnership with Sinoma will continue to focus on other value-enhancing initiatives across all PPC plants and regions. ■
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