Long hours, dedication and commitment by the PPC team have been hallmarks of 2007; with the processes of running a tight production schedule, progressing the capacity expansion projects, an empowerment transaction and unbundling from the parent company, Barloworld.

PPC’s unbundling from the Barloworld group was completed in July this financial year. The process went smoothly and numerous services previously provided by Barloworld are now being undertaken in-house at PPC. In addition, staff and pensioners were moved to new group medical aid schemes. Further, the share split of 10 for 1 was completed and PPC now trades with significant free float and has positioned itself as an “infrastructure share” internationally.

I indicated at the annual general meeting held in January, that I intended to step down as chairman as soon as the company’s broad-based black economic empowerment transaction was completed and a black chairman could be appointed.

A self imposed tight deadline of 30 September 2007 was set for the completion of the empowerment transaction. The broad-based nature, complexity and number of parties involved in the transaction, and the approaching holiday season means that shareholder approval of the scheme will only be sought in 2008 and I will remain as chairman pending the completion of this transaction.

The past year has seen a solid performance by the company; characterised by continued cement volume growth, albeit somewhat slower, manufacturing output which almost reached capacity and the regular import of cement, ensuring that customer needs were met. Operating profit increased 17% to R2 174 million with headline earnings per share of 263 cents per share, a 16% rise.

All cement kilns ran hard for the year, with some of the older equipment requiring significantly more maintenance. Maintenance crews were stretched to undertake repairs in record time whilst factory and distribution staff worked long hours to ensure our customer delivery promises were met.

Cement demand continues to climb locally, and whilst higher interest rates will inevitably temper demand in the residential sector, this could well be offset by an increased government infrastructure spend. Investment by government continues with tenders for major roads, ports, electricity plants, airports, stadiums and dams being awarded or in the pipeline. The ongoing need for low-cost housing in South Africa will also account for growing cement demand locally.

To meet demand, Surebuild cement manufactured to PPC’s specifications was imported from China and supplied to the South African coastal markets and Mozambique. In addition, our Porthold Zimbabwe plant also supplied clinker and cement to South Africa and Botswana which alleviated some of the pressures in the Inland market. Imports were restricted to the lower end of the volume range predicted last year as particularly wet weather conditions in the Western Cape curtailed cement demand during the winter months. Whilst there has been significant media coverage related to cement imports into South Africa, our imports represented only 5% of total sales.

Additional logistical costs were incurred with the movement of cement around the country, so that product was available in the correct markets, thereby meeting our customer delivery promises. The Batsweledi expansion project will increase capacity in the Inland region, and provide cement to a region where it is most needed.