PPC, the JSE-listed cement manufacturer, has reorganized its executive committee following the recent appointment of Matias Cardarellias as the new CEO in December. The company aims to counter the challenges posed by a widened loss in headline earnings per share and projected low demand for cement in the South African market.

The board of directors approved a significant restructuring of the executive committee to drive improved profitability and ensure a sustainable return on capital for its South African business, PPC announced on Thursday.

The newly appointed Chief Operating Officer, Ernesto Acosta, and Chief Strategy Officer, Paulo Marques, both seasoned business executives with over 20 years of experience in the cement industry, are set to bring their expertise to focus on increasing efficiencies, productivity, and cost reduction initiatives. The Chief Revenue Officer, Mokate Ramafoko, will play a crucial role in creating a single revenue engine and boosting the company’s top line.

Addressing the changes, CEO Matias Cardarelli stated, “This is a transformational time for us at PPC. Building the new exco team is the first step in establishing the right organizational structure.” He emphasized that the new appointments provide PPC with a blend of global and local cement industry experience, institutional knowledge, and energy needed to drive growth, improve profitability, and enhance returns.

Cardarelli outlined the distinctive characteristics of the new team, emphasizing accountability, ownership, agility, and a focus on results. The CEO expects the restructured executive management to contribute to raising revenue beyond the R10 billion achieved last year, despite the challenging macroeconomic environment in the country.

The company’s optimism hinges on potential increased demand from an enhanced infrastructure program and a stronger economic climate, essential for effectively utilizing the capacity available in the South African market. PPC expressed hope that the South African government would support the local cement market through the introduction of blanket import tariffs.

In the 2023 full year, PPC focused on disciplined capital investment, with a reduction from R553 million in 2022 to R415 million. The reduction was primarily attributed to South Africa and Botswana Cement, recording a R53 million reduction, and Zimbabwe, which saw a R69 million reduction over the same period. Despite a slump in supply in the Zimbabwe market, PPC South Africa remains well-positioned to benefit from an increase in cement demand, with additional capacity readily available without the need for additional capital expenditure.

However, the company acknowledges that without a significant increase in infrastructure spending and South African gross domestic product, cement demand in South Africa is expected to remain subdued this year. PPC South Africa is prepared to capture an upswing in demand, leveraging its additional capacity.

PPC’s restructuring of its executive committee reflects a proactive approach to navigate challenges and boost profitability. The new team, with its blend of expertise and energy, is poised to drive PPC’s growth in a challenging market environment, while the company remains hopeful for increased demand through infrastructure development and government support.