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Trading conditions remain difficult as weak infrastructure spending, subdued construction activity and persistent cost pressures continue to weigh on demand across its key markets, PPC says.The cement producer said in its latest annual report that public sector infrastructure delivery remained slower than expected in parts of Southern Africa in the 2026 financial year, while inflationary pressures, logistics constraints and weak economic growth continued to dampen construction activity and customer demand.FNB’s building confidence index shows activity in South Africa’s nonresidential building sector slowed in the second quarter, though it is still above its long-term average. The bank said the sector continued to outperform the residential market, supported by improving demand for industrial and office space after years of weak activity.PPC, which operates in South Africa, Zimbabwe and Botswana, said it is focusing on improving efficiency as rising transport and energy costs pressure margins.“Rising transport and energy costs continued placing pressure on margins across the sector, increasing the importance of procurement optimisation, operational reliability and productivity improvements,” it said.Despite the tough trading environment, PPC said some private-sector projects and infrastructure work continue to support demand in South Africa. Government spending on infrastructure has started to improve in some regional markets, though projects are still being rolled out slowly.During the year, PPC remained focused on its “awaken the giant” strategy, which aims to improve efficiency, lower costs and drive sustainable profitability.The group said the improvement in performance was broad-based, with South Africa and Botswana returning increasing earnings as turnaround efforts gained traction, while Zimbabwe delivered another year of record earnings before interest, tax, depreciation and amortisation (ebitda).With cement manufacturing among the most carbon-intensive industries, the group continued strengthening its sustainability efforts through renewable energy and alternative fuel projects. PPC continued to advance the RK3 integrated plant project in the Western Cape, aimed at modernising its operations through improved production efficiency, lower energy use and reduced carbon emissions.“Our environmental priorities remain closely linked to operational efficiency, cost competitiveness and long-term sustainability. During the 2026 financial year, we continued embedding environmental stewardship across our operations, strategic projects and broader sustainability initiatives,” it said.Discussions about roads, energy, water, housing and logistics infrastructure in Southern African markets continue to present medium- to long-term opportunities for the cement and construction sectors, though implementation timelines remain uneven across markets, PPC said.However, it cautioned that while governments across Southern Africa continue to prioritise infrastructure investment, delays in project implementation are slowing the pace of demand recovery. It also flagged growing concern over imported cement and dumping, saying these continue to undermine local manufacturers and reinforce the need for efficient operations and resilient supply chains.Business Day
