PPC | Invader Zim
Zimbabwean operations accounted for 15% of our valuation of PPC in 2018 due to high cement demand and EBITDA margins in excess of 30%. However, the Zimbabwean government is constantly changing policies regarding currency utilisation. Thus, PPC Zimbabwe accounts for c.1% of our total valuation despite it generating the most “cash†for the Group. Encouragingly, although cement volumes in the rest of Africa were disappointing, the Group's ability to control costs and preserve margins throughout challenging environments across Africa is impressive. In our view, PPC could benefit from operating leverage following an increase in volumes as operations continue ramping up.PPC operates cement, lime, aggregates and readymix and other. Co.'s core activities comprised of: Exploration, which is involved in source and secure limestone deposits; Procurement, which is involved in other input materials, consumables and equipment; Mining, which is involved in extracting limestone and deliver to factory; Manufacturing, which is involved in converting limestone into cement/lime; Distribution, which is involved in facilitating transport of cement to customers in bulk and bag format; Sales, which is involved in executing customer orders; and Marketing, which is involved in building brand value.
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