Following his first 100 days as CEO of cement producer PPC, Darryll Castle reports that action plans have been put in place to more aggressively win back market share within South Africa, while pressing ahead with its high-potential African expansion strategy.

A civil engineer by profession, but with extensive mining and financial experience, Castle took up his position on January 12, following an ugly boardroom battle that saw former CEO, Ketso Gordhan, initially resign from the group and then engage in a protracted battle to regain the position.

Speaking in Johannesburg on the same day that the JSE-listed group marketed its 123^rd birthday, Castle said that, with the leadership imbroglio behind it, he and his executive team were concentrating on improving the performance of the company, notwithstanding the headwinds associated with the currently lacklustre South African economy.

As part of a ‘keeping the home fires burning’ vision, programmes to capture market share, reduce costs and improve operational efficiencies were being formalised under a ‘profit improvement programme’, the details of which would be unveiled together with interim results on May 19.

Having rejected rival AfriSam’s friendly merger offer – primarily owing to the risks posed to a deal by South Africa’s competition legislation – PPC would be pursuing an organic growth strategy in its home market. The focus, Castle revealed, would be an improved domestic market offering, together with the adoption of a more aggressive stance in fending off import competition.

PPC, together with other South African cement producers, had lodged an antidumping complaint with the International Trade Administration Commission of South African against cement imports from Pakistan. Castle was optimistic that tariff relief would be granted in the not too distant future.

However, the group would also overhaul its domestic market offering, with the intention of combining its “premium brand” status with greater pricing responsiveness. Using a football analogy, Castle said that having a strong brand with unresponsive pricing was akin to “having the best striker in the world, but he’s sitting on the bench.”

In the rest of Africa, meanwhile, on-time and on-budget project delivery was being prioritised, along with the development of country-specific business plans to ensure the projects in Rwanda, Zimbabwe, the Democratic Republic of Congo and Ethiopia delivered on their promise.

Castle said the earlier guidance of the non-South African operations delivering 40% of revenue by 2017 remained intact and that, besides the Ethiopian project, the other three developments were more or less on schedule and within budget.

He stressed that the developments would provide the platform for the group’s next 123 years, but said that the group would need to be far more innovative in the way it approached future opportunities, with the “obvious” markets and targets having already been pursued by PPC and its rivals.

The other immediate priority related to managing the debt associated with the projects.

PPC expected its debt to peak at between R10-billion and R12-billion in 2017 and Castle said it was engaging with its bankers on the structure of the debt covenants, which currently failed to take account of PPC undertaking project-financed projects outside of South Africa.

“We will communicate those changes once we have an agreement with the banks,” Castle said, stressing that, while it may breach current covenants in the interim, no capital raising initiatives will be triggered as a result.

“All that will be triggered is the discussion, which we are currently having, about what sensible covenant ratios are for the group.”