the roots of pretoria portland cement company · the roots of pretoria portland cement company...
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PPC’s Slurry plant in the North West Province
For PPC, our icon, the elephant, symbolises strength, stature and dependability. This, combined with its wisdom, maturity, family orientation and loyalty, encapsulates the essence of PPC
The roots of Pretoria Portland Cement Company
Limited (PPC) stretch back well over a century to
1892 when it established the fi rst cement plant in
South Africa. PPC listed on the then Johannesburg
Stock Exchange in 1910.
Today, PPC is the leading supplier of cement in
southern Africa. Collectively, eight manufacturing
facilities and three milling depots in South
Africa, Botswana and Zimbabwe are capable of
producing almost eight million tons of cement
products each year.
PPC’s established distribution network supplies
quality branded cement to the building
and construction industry, concrete product
manufacturers, hardware stores and DIY centres.
The group’s product range spans all applications,
supported by a technical services team known for
developing innovative industry solutions.
Related products include aggregates from PPC’s
Gauteng quarries at Mooiplaas and Laezonia,
and in Botswana.
PPC Lime is the leading supplier of metallurgical-
grade lime, burnt dolomite, limestone and related
products in southern Africa. It operates one of
the largest lime plants in the world at Lime Acres
in the Northern Cape, South Africa.
A vital element in maintaining its market
leadership in the region is PPC’s unwavering
commitment to excellence in satisfying customers’
needs and striving for total quality across its
operations.
Fast facts Profi le
Our strategy
• Focus on core businesses
• Generate superior cash fl ow returns
• Achieve global competitiveness
• Develop globally competitive people
• Practise sound corporate, environmental and social governance
• Build on our strengths through synergistic growth
Accreditedas BBBEE level
3
9Group
revenue
-17Energy consumed
per ton of product
Reader note:Given its broad stakeholder base, PPC has elected to publish separate annual financial and sustainability reports in 2009 to enable wider but cost-effective dissemination of its sustainability practices and progress. We also believe a stand-alone sustainability report will enable the group to elicit pertinent feedback from stakeholders that will be incorporated into future strategies and initiatives.
These reports should be read together for a fuller understanding of the group’s performance, strategies and objectives.Where reference is made to other sections in this report, readers are given the page number.
Where reference is made to the companion volume to this report, readers are guided by the icon and page number.
Business objectives
Economic
• Ensure cash fl ow returns that allow for continued reinvestment in and replacement of capacity
• Continuously explore ways to reduce costs and improve effi ciency of operations
Operational
• Reduce energy cost
• Increase manufacturing capacity to meet the country’s needs
Environmental
• Reduce energy consumption
• Rehabilitate and obtain closure certifi cates for all worked-out mining areas
• Meet all legislated emission level requirements and further reduce emissions
• Reduce non-renewable resource requirements by optimising the level of extenders in the fi nal product
Social
• Assist with uplifting disadvantaged communities by investing in and using resources from the communities in which PPC operates
• Skills transfer in disadvantaged communities for sustainable empowerment
• Continue to develop BBBEE in line with applicable guidelines and legislation
Moving forward
Page 1
Pretoria Portland Cement Company Limited Annual Report 2009
Financial highlights
Operating profit
Operating profi t up 4% to R2 418 million
(2008: R2 323 million)
* Excluding impact of the BBBEE IFRS 2 charges and the take-on gain arising from the
consolidation of Porthold
Cash earnings
Cash earnings per share up 6% to 329 cents (2008: 311 cents per share)
0
2 000
4 000
6 000
8 000
2006 2007 2008 2009
4 68
6 5 56
6 6 24
8 6 78
3
Revenue (R million)
0
50
100
150
200
250
300
226
263 28
3
257
Headline earningsper share (cents)
2006 2007 2008 2009
0
1 000
2 000
3 000
2 03
0 2 37
0 2 54
1 2 73
3
EBITDA (R million)
2006 2007 2008 2009
0
500
1 000
1 500
2 000
1 43
7
1 46
0 1 64
4
1 72
8
Cash available from operations (R million)
2006 2007 2008 2009
*
Page 2
Pretoria Portland Cement Company Limited Annual Report 2009
Financial summary
• Over 7% of payroll spent on employee
training and development
• Behaviour-based safety campaign results
in 1,5 million accident-free hours for the
Ntšhafatso project
• 15% reduction in CO2 emissions per ton
cement, lime and dolomite from 1990
to 2009
• 17% reduction in energy consumption
per ton cement, lime and dolomite from
2000 to 2009
Sustainability highlights
2009 2008 2007
Financial results (R million)Revenue 6 783 6 248 5 566
Operating profi t* 2 418 2 323 2 174
Property, plant and equipment 3 941 2 813 2 178
Total assets 5 819 4 534 4 882
Cash generated from operations 2 602 2 546 2 192
Ordinary share analysis (cents per share) Headline earnings per share (cents)* 256,8 282,6 263,1
Earnings per share (cents)* 257,3 283,5 265,8
Dividends per share (cents) 200,0 225,0 265,5
Number of employees# 3 234 3 164 3 097
* Excluding BBBEE IFRS 2 charges and take-on gain on consolidation of Porthold# Includes employees in Botswana and Zimbabwe
PPC’s sustainability performance for 2009 is
summarised on pages 58 to 65. A separate sustainable
development report accompanies this annual report.
It can also be accessed on www.ppc.co.za
Page 3
Investment proposition
Operations and locationsp
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1 Hercules 2 Jupiter 3 Slurry 4 Dwaalboom 5 Riebeeck 6 De Hoek 7 Port Elizabeth 8 Colleen Bawn (Zimbabwe) 9 Bulawayo (Zimbabwe) 10 Beestekraal quarry 11 Dwaalboom quarry 12 Slurry quarry 13 Zoutkloof quarry
▲ Cement plants
▼ Limestone quarries
❍ Aggregate quarries
■ Lime quarries
◗ Lime plant
❋ Gypsum quarry
❖ Head offi ce
* Materials handling facility
14 Riebeeck quarry15 Grassridge quarry16 Colleen Bawn quarry (Zimbabwe)17 Lime Acres18 Lime Acres quarry19 Mount Stewart quarry20 Laezonia quarry21 Mooiplaas quarry22 Kgale quarry (Botswana)23 Gaborone (Botswana)24 Head offi ce (Sandton)25 Saldanha
• Leading producer with best geographic spread
• Strong infrastructural demand outlook to 2014
• New capacity available
• Cash generative
• Excellent dividend yield history
• Strong balance sheet
• Financial strength to explore expansion opportunities
• Experienced management team
Page 4
Pretoria Portland Cement Company Limited Annual Report 2009
Group at a glance
R million 2009 2008 Change
Revenue 5 948 5 368 11%
EBITDA 2 536 2 281 11%
EBITDA margin (%) 42,6 42,5
Total assets* 5 227 3 944 33%
*Includes Porthold assets of R675 million in 2009
OverviewPPC was established 118 years ago as De Eerste Cement Fabrieken Beperkt and is today the acknowledged market leader in South Africa. The history of PPC is closely linked to the growth and development of South Africa – PPC has produced cement for many of the country’s most famous landmarks and construction projects, including the Union Buildings, Gariep Dam, Van Staden’s River Bridge, new Greenpoint Stadium and much of the rest of southern Africa’s infrastructure.
The company’s cementitious brands in South Africa include the market-leading Surebuild and specialist cement brands Rapo and OPC. In addition to serving southern African markets, cement is exported to other African countries and the Indian Ocean islands.
PPC International Trading is responsible for exports of PPC cement from South Africa, and trading cement sourced elsewhere into various other markets.
Cement
PortholdRegistered in Zimbabwe, Porthold’s core product is Unicem, a trusted cement made at the Bulawayo factory from high-quality raw materials.
PPC BotswanaPPC Botswana has been operational for over 50 years. From its sales offi ce and cement-blending operation in Gaborone, it supplies cement throughout Botswana.
Page 5
Group at a glance continued
OverviewPPC Lime has grown from small beginnings in 1907 at Uitloop in Limpopo producing lime for the burgeoning gold mining industry, into one of the largest lime producers in the southern hemisphere, supplying almost 60% of the lime consumed in southern Africa.
PPC Lime is certifi ed to ISO 9001, 14001 and OHSAS 18001 (safety management) standards. Together with SANS 1841 and a fi ve-star Dekra rating, customers are continually assured of superior quality products.
Lime
Lime productsUnslaked lime, hydrated lime and limestone.
PPC LimePPC Lime is the leading supplier of metallurgical-grade lime, burnt dolomite and related products in southern Africa.
R million 2009 2008 Change
Revenue 544 599 (9%)
EBITDA 121 167 (28%)
EBITDA margin (%) 22,3 27,9
Total assets 392 404 (3%)
Page 6
Pretoria Portland Cement Company Limited Annual Report 2009
Overview PPC Aggregates supplies quality construction aggregates to the civil construction sector as well as products for the chemical, metallurgical and agricultural industries. Mooiplaas, Laezonia and Kgale quarries are ISO 9001:2000 certifi ed and members of the Aggregate and Sand Producers Association of South Africa (ASPASA). All operations are committed to producing quality products to meet customers’ requirements in the most cost-effective manner.
Aggregates
Aggregate productsConcrete stone, road stone, crusher sand, river sand, building sand, plaster sand, Magalies silica, natural base, sub-base, fi ll material, dolomite and agricultural lime.
PPC Aggregate QuarriesMooiplaas dolomite mine and Laezonia quarry produce quality aggregates and sands to meet diverse customer requirements.
Kgale Quarries At this quarry in Kgale Hills, Botswana, granite is processed into quality aggregates and sands.
R million 2009 2008 Change
Revenue 296 281 5%
EBITDA 84 93 (10%)
EBITDA margin (%) 28,4 33,1
Total assets 196 186 5%
Page 7
Directorate
Note: Directors’ CVs can be found on page 56 in the corporate governance section of this annual report.
Page 8
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Pretoria Portland Cement Company Limited Annual Report 2009
66
58
38
28
12
01
Ove
rvie
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10
1 Bheki Lindinkosi Sibiya Chairman
2 Paul Stuiver Chief executive offi cer
3 Salim Abdul Kader Executive director, organisational performance and transformation
4 Robert Harley Dent Executive director, lime, aggregates and strategic projects
5 Peter Esterhuysen Chief fi nancial offi cer
6 Zibusiso Janice Kganyago Independent non-executive director
7 André Jacobus Lamprecht Independent non-executive director
8 Nomalizo Beryl Langa-Royds Independent non-executive director
9 Mangalani Pieter Malungani Non-executive director
10 Timothy Dacre Aird Ross Independent non-executive director
11 Joe Shibambo Independent non-executive director
12 Jerry Siklulumi Vilakazi Non-executive director
IFC Profile
2 Financial highlights
3 Financial summary and sustainability highlights
4 Investment proposition
4 Operations and locations
5 Group at a glance
8 Directorate in brief
12 Chairman’s report
18 Chief executive officer’s report
24 Chief financial officer’s report
28 Porthold review
34 Operational review: Cement
37 Operational review: Lime and Aggregates
38 Corporate governance structure and management systems
56 Board of directors – full CVs
58 Sustainability review
69 Report of the independent auditors
70 Directors’ report
89 Accounting policies
100 Group financial results
154 Company financial results
181 Administration
182 Notice of annual general meeting
185 Form of proxy
187 Index to Global Reporting Initiative indicators
Page 9
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