Shares in PPC slumped by 7.69 percent to close at R30 yesterday after the listed cement and lime producer shocked the market by announcing the resignation of chief executive Ketso Gordhan.
The company said Gordhan had “regrettably resigned due to differences of opinion with the board, regarding board procedures for the approval of certain decisions”.
He took over from Paul Stuiver on January 1 last year.
Gordhan said he had enjoyed his time at the leading local cement producer and was proud to have implemented a number of new initiatives and set the company on an exciting growth path. “I am leaving with a heavy heart.”
PPC non-executive chairman Bheki Sibiya will take on the role of executive chairman with immediate effect until a new chief executive is appointed.
Tim Ross, an independent non-executive director and chairman of the audit committee, has assumed the role of lead independent director of the board.
The process to recruit and appoint a new chief has begun.
Gordhan acquired 200 000 PPC shares valued at more than R6 million in August last year and, together with his forfeitable share plan allocation earlier last year, this made him one of the top 25 direct private beneficial shareholders.
He said at the time that his share purchase was an indication of his confidence in the business, especially its African expansion strategy.
“I see an incredible future for PPC and as the chief executive, I need to demonstrate my confidence in achieving PPC’s vision of doubling the size of this business over the next six to seven years.”
Sibonginkosi Nyanga, an analyst at Imara SP Reid, admitted he was shocked by Gordhan’s resignation.
“It’s caught us off guard. I don’t think anyone was expecting it.”
Earlier Imara predicted that PPC’s African expansion would result in the company becoming a favourite with investors, especially among South African institutions.
Nyanga said Gordhan’s resignation would not change PPC’s expansion strategy but “all along Ketso was the one running with the strategy. I’m not sure if anyone will be able to run with it like Ketso”.
Nyanga said Gordhan, with all his political links, also had an advantage over others in that he could “knock at any door and it would open”.
He added that with Sephaku Cement’s entry into the South African market and some plants in PPC’s African expansion strategy only being ready in 2016 and 2017, it could be a tough period for the company.
Sibiya admitted Gordhan had been instrumental in the execution of PPC’s African expansion strategy, which had now gained significant traction.
He should also be commended for his excellent work in closing the remuneration gap within the organisation and implementing an innovative employee housing support initiative, the chairman said.
“He [Gordhan] has agreed to continue providing input to crucial projects that he was leading.”
Sibiya stressed the growth momentum of the company remained on track and it had signed engineering, procurement and construction contracts for four projects and construction was under way on these projects in Rwanda, the Democratic Republic of Congo, Ethiopia and Zimbabwe.
He added that PPC had a capable and experienced management team on the continent led by Pepe Meijer, the managing director of PPC International, who had more than 25 years’ experience with the company.
“He will continue to implement the expansion of the business into the rest of Africa. The South African business remains in good hands under the leadership of Richard Tomes and Johan Claassen as joint managing directors, who collectively have more than 40 years’ experience at PPC.”