PPC restructures executive committee to drive SA growth amid headwinds
JSE-listed cement manufacturer PPC has reorganised its executive committee, instituting appointments to new roles such as chief revenue officer and chief operating officer as the company guns for an uplift in profitability for its South African business.
In December, PPC appointed Matias Cardarellias as the new CEO. He took over from Roland van Wijnen against the backdrop of an 8 cents loss in headline earnings per share for the full year to June 2023 that had widened from the previous year’s loss of 3 cents.
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Now, PPC says it has restructured the executive committee to enhance its profitability prospects amid projected low demand for cement in the South Africa market.
“The board of directors has approved a substantially reorganised and strengthened executive committee in order to drive improved profitability and a sustainable return on capital for its South African business,” the company said on Thursday.
In September, PPC said there was a need for further operational efficiencies and cost containment measures to mitigate rising input costs. That was amid a muted economic climate in the key South African market where competition had also remained high across its product portfolio.
The new chief operations officer would focus “on increasing efficiencies, productivity and cost reduction initiatives” and the chief strategy officer would work closely with chief financial officer, Brenda Berlin, to implement profit improvement initiatives. The chief revenue officer (CRO) would be responsible for creating a single revenue engine and boosting the company’s top line.
PPC appointed Mokate Ramafoko to the CRO position, recruited Kevin Ross as chief legal and compliance officer and company secretary.
Experienced business executives Ernesto Acosta and Paulo Marques would take up the roles of COO and CSO, respectively, bringing in a wealth of experience in the cement industry spanning more than 20 years each, the company said.
“This is a transformational time for us at PPC. Building the new exco team is the first step in establishing the right organisational structure,” Cardarelli said.
He said the new appointments gave PPC “the right blend of global and local cement industry experience, institutional knowledge and energy” to drive the company’s growth, improve profitability and enhance returns.
“Accountability, ownership, agility and focus on results, are going to be the distinctive characteristics of the new team,” he added.
Cardarelli would be expecting the new executive management of the company to contribute to raising revenue beyond the R10 billion notched up last year i spite of a “weak macro environment” in the country.
That would hinge on possible increased demand from an enhanced infrastructure programme and a stronger economic climate that was required to enable PPC “to more effectively utilise the capacity available” in the South Africa market.
“We, therefore, remain hopeful that the South African government will roll out its infrastructure development plans and protect the local cement market through the introduction of blanket import tariffs,” the company said in September.
In the 2023 full year, PPC had worked on a disciplined capital investment, which, however, had lowered from R553 million in 2022 to R415m. The reduction in capital spend for the period was largely attributable to South Africa and Botswana Cement, which had recorded a R53m reduction and Zimbabwe which had seen a R69m reduction over the same period.
The Zimbabwe market had recently witnessed a slump in supply, with operators struggling to meet demand from government infrastructure spend and resurgent residential housing activity.
But without a significant increase in infrastructure spending and South African gross domestic product, cement demand in South Africa was “expected to remain subdued” this year.
Regardless, PPC South Africa was well positioned to benefit from an increase in cement demand, with additional capacity readily available to capture an upswing in demand without additional capital expenditure required.
PPC restructures executive committee to drive SA growth amid headwinds