PPC’s Castle sees need for consolidation in cement industry
South Africa’s cement industry would benefit from consolidation because there are too many players for the size of the market, says Darryll Castle, CEO of PPC.
The company is “keeping an an eye on the whole industry”, Castle said after declining to comment on whether PPC is in talks with rival AfriSam Group. The two Johannesburg-based companies have revived discussions about a merger almost two years after talks were abandoned, people familiar with the matter said this week.
“There’s nothing to announce,” Castle said. “In the longer term there’s no doubt that there needs to be some kind of consolidation in the industry and you can be sure that as PPC it would benefit us because we are the big player.”
There are five producers operating in the country, and consolidation would help cut costs and improve efficiencies for the remaining competitors, the CEO said.
A combination of PPC and AfriSam is likely to have the support of the continent’s largest fund manager and AfriSam’s controlling shareholder, the Public Investment Corporation, according to the people familiar with the matter, who asked not to be identified because the deliberations are private.