Roy Cokayne
Pretoria Portland Cement (PPC) had been granted environmental authorisation for phase two of its R3 billion Western Cape modernisation strategy, it said yesterday.
The listed cement and lime producer said the provincial Environmental Affairs and Development Planning Department had approved the plan.
PPC warned that the decision could still be appealed by interested and affected parties.
Phase two of the strategy involves the planned replacement of two ageing cement kilns at the Riebeeck plant with a new five-stage preheater kiln.
PPC recently completed the R280 million first phase of the plan, which involved the upgrading of a cement kiln at the De Hoek plant near Piketberg.
It said the cement kiln was originally commissioned in 1980 and the upgrade would result in it achieving similar environmental and thermal efficiencies as modern kilns.
PPC said it had embarked on the modernisation strategy to ensure it would have competitive, energy-efficient plants that complied with future changes to South African environmental legislation.
The company estimated the complete modernisation strategy would be sufficient to meet Western Cape cement demand for the next decade, it said.
PPC said in August 2010 that it had cut back its planned capa-city expansion project in the Western Cape by a third and extended the timeframe.
In terms of its new plan, PPC was planning to spend R3bn over six years instead of R4.5bn over four years. It would upgrade and increase capacity at its existing Riebeeck and De Hoek operations instead of building a single new factory.
PPC chief executive Paul Stuiver said at the time that the original design had been done during a period of peak demand and cement shortages and the economic landscape and capacity requirements had changed significantly since then.
But Stuiver stressed that PPC would still achieve its original objectives with the revised plan in terms of environmental standards, energy efficiency and capacity expansion in the Western Cape region but in phases and over a longer time.
The upgrade of the existing plant will increase capacity in the Western Cape by about 50 percent by 2016 and the combined capacity of the two sites will be the same as the original project.
Cement demand in the Western Cape peaked during 2007/08 and exceeded PPC’s manufacturing capacity. However, there was a 40 percent fall in provincial demand between 2007/08 and August 2010.
Since then announcements have also been made about two new entrants to the domestic cement market. These are Sephaku Cement and a joint venture between leading black women-owned firm Women Investment Portfolio Holdings, South African limestone mining firm Continental Cement, leading Chinese cement group Jidong Development Group and the China-Africa Development Fund.
PPC stock declined 1.66 percent to R28.35 yesterday.