Executing on priorities in pursuit of stakeholder value heater ILC and grate cooler Slurry 2.0 mtpa...

Executing on priorities in pursuit of stakeholder value

DE HOEK SITE VISIT 24 SEPTEMBER 2018

SLURRY SITE VISIT 27 SEPTEMBER 2018

4

PPC SITE VISITS SLURRY AND DE HOEK – SEPTEMBER 2018

CONTENTS

SA OPERATING CONTEXT

page 3

DE HOEK SITE VISIT

page 10

SLURRY COMPLEX SITE VISIT

page 26

1. SA OPERATING CONTEXT

NJOMBO LEKULA – MD SA

CEMENT

6


1.1 SUPPLY DEMAND DYNAMICS

6

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

6 000

8 000

10 000

12 000

14 000

16 000

18 000

20 000

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

'00

0 t

on

ne

s

ANNUAL CEMENTITOUS SUPPLY AND DEMAND IN SOUTH AFRICA, BOTSWANA, LESOTHO & SWAZILAND

Industry demand Industry demand locally produced Industry Capacity (with SK9) Annual % change in demand

SK9 provides PPC with newest technology in the domestic industry

In 2020 an estimated 3mtpa of industry capacity will not meet emissions regulations

After 2020 the industry will be running at high capacity suggesting additional capacity will be required

New entrant

New entrant

PPC - Dwaalboom

PPC SK9

7


1.2 PLANTS IN SOUTH AFRICA | MODERNISED

7

Comment

• SK9 latest kiln technology

(2018)

• Capex – R1.9bn

• VRM technology

• Capex – R2.0bn

Capacity TechnologyComplex

2.0 mtpa

6 stage pre-

heater ILC and

grate cooler

Slurry

2.0 mtpa

6 stage pre-

heater ILC and

grate cooler

Dwaalboom +

Hercules

1.2 mtpa

4 stage pre-

heater and

grate cooler

DeHoek• Kiln upgrade

• Capex – R500m

Z A R 4 , 4 b n M O D E R N I S AT I O N C A P E X S P E N T I N S A I N T H E L A S T D E C A D E

P L A N T S I Z E A N D T E C H N O L O G Y M AT T E R – W E H AV E B O T H

P R I M E L O C AT I O N – P R O X I M I T Y T O M A R K E T, S T R AT E G I C R A W M AT E R I A L S

M A N U FA C T U R I N G F O O T P R I N T A N D E F F I C I E N C Y I N C L A LT E R N AT I V E F U E L T E C H N O L O G Y

Efficiency

https://www.google.co.za/url?sa=i&source=images&cd=&ved=2ahUKEwjM2Pi2ja3bAhWBxxQKHfsVA_EQjRx6BAgBEAU&url=http://www.zkg.de/en/artikel/zkg_2009-11_Focus_on_the_Sub-Saharan_cement_industry_340563.html&psig=AOvVaw0ICHFuzPrvDWxwWZkbIs4d&ust=1527758316003754

8


1.3 THREE MEGA PLANT STRATEGY CAPITALISES ON OUR

FOOTPRINT

8

P P C H A S T H E M O S T D E S I R A B L E C E M E N T D E L I V E R Y F O O T P R I N T I N S O U T H A F R I C A

PPC footprint enables:

• I n t eg ra ted p lan t s and

depo t s t o se rve

k ey m ark e t s

• B lend ing f ac i l i t i es c l os e

t o t he m ark e t

• Por t f o l i o e f f ec t de l i ve r i ng

p ro f i t ab i l i t y

• Ab i l i t y t o de l i ve r a t l owes t

cos t t h rough op t im a l

s ourc ing

* Grinding plant only

Key

*cement capacity

PPCPPC Mega plant (3)

PPC Grinding plant (3)

Free State

Mpumalanga

North-West

GAUTENG

Pretoria

Stormill BlendingIsando Blending

Meyerton

Blending

and

milling

9

3

3

2

3

1

Botswana

Port Elizabeth

Polokwane

Lichtenburg

Cape Town

Saldanha

* Riebeeck

De Hoek

Richards Bay

Port Shepstone

East London

Durban

Newcastle

Gaborone

Nelspruit

*Johannesburg

1

2

3

9


1.4 PPC STRATEGIC RESPONSES TO MARKET FACTORS

9

18Mt

14Mt

1,0Mt

INDUSTRY CAPACITY

LOCALLY PRODUCED

INDUSTRY

DEMAND

IMPORTS

25% excess

capacity gap

29% excess

capacity gap

SOUTH AFRICA CEMENT DEMAND AND CAPACITY (2018e)*

18Mt

14Mt

*Estimated data from market and industry sources

• Cement imports

• Growth of third party blenders leading to

• Erosion of quality

• Detraction from market related pricing

• Value destruction for stakeholders

KEY CHALLENGES

PPC STRATEGIC RESPONSES

• Lobbying government to impose tariffs on

cement imports

• Driving efficiencies through cost leadership

and optimal sourcing

• Continued innovation in alternative building

technologies

• Enhanced product portfolio and route to

market strategy implementation

P P C C O N T I N U E S T O E N G A G E G O V E R N M E N T A N D R E G U L AT O R Y B O D I E S O N T H E S E

I S S U E S

10


90.00

95.00

100.00

105.00

Jan-1

5

Feb

-15

Ma

r-1

5

Apr-

15

Ma

y-1

5

Jun-1

5

Jul-1

5

Aug-1

5

Sep-1

5

Oct-

15

No

v-1

5

De

c-1

5

Jan-1

6

Feb

-16

Ma

r-1

6

Apr-

16

Ma

y-1

6

Jun-1

6

Jul-1

6

Aug-1

6

Sep-1

6

Oct-

16

No

v-1

6

De

c-1

6

Jan-1

7

Feb

-17

Ma

r-1

7

Apr-

17

Ma

y-1

7

Jun-1

7

Jul-1

7

Aug-1

7

Sep-1

7

Oct-

17

No

v-1

7

De

c-1

7

Jan-1

8

Feb

-18

Ma

r-1

8

Apr-

18

Ma

y-1

8

Jun-1

8

Jul-1

8

Aug-1

8

10

1.5 CONTINUED PRICE RECOVERY IN A CHALLENGING TRADING

ENVIRONMENT

AVERAGE SELLING PRICE (ASP) TRENDS

Source: PPC Research ASP indexed from January 2015

Pricing

bottomed

W E C O N T I N U E TO R E A L I S E E F F E C T I V E P R I C E I N C R E A S E S

11


1.6 NEW SURE RANGE OF PRODUCTS LAUNCHED

Cement for road

stabilisation

Premium

multipurpose

cement for

general building &

civil

Masonry cement

designed for

plaster & mortar

Early strength

cement designed

for concrete,

mortar, plaster &

bricks

High early strength

cement designed

for precast

products

Superior high

strength specialist

cement

F I T F O R P U R P O S E R A N G E O F C E M E N T S TO C AT E R TO A L L C U S TO M E R

N E E D S9

3. SLURRY COMPLEX SITE VISITFRIKKIE VAN ZYL – GM SLURRY

COMPLEX

29


3.1 SLURRY COMPLEX TEAM

GM Frikkie Van Zyl

Jannie De Witt

Despatch Manager

Patience Mosieleng

Admin Manager

Pieter Meyer

QA Manager

Tumisang Totong

SHE Manager

Sbonelo Zondo

HR Manager

Andre Niemand

Quarry Manager

Amos Mabetha

Engineering Manager

Lucian Slinger

Production Manager

E X P E R I E N C E D M A N A G E M E N T T E A M

29

30


3.2 SLURRY COMPLEX LOCATION AND MARKET

Botswana: 42%

North West: 32%

Gauteng: 8%

Mpumalanga: 8%

KwaZulu Natal: 8%

Rest: 2%

• PPC has a dedicated rail line used for delivery to Botswana

• Some limited product goes to the Eastern Cape and

Free State provinces

• Clinker transfers occur from Slurry to Jupiter with backhaul

of boiler ash and gypsum

• 387 unique customers

Slurry predominantly supplies product to 5 regions

9

3

3

2

3

1

Botswana

PolokwaneGaborone

Nelspruit

Johannesburg

Lichtenburg

30

31


3.3 SLURRY COMPLEX AERIAL VIEW

Village

Despatch We are here

31

32


3.4 SLURRY COMPLEX OVERVIEW | 2.0MTPA CAPACITY

32

New Old Old with

upgrades

Coal feeding system

Overhead crane

Coal,

clinker,

gypsum

storage

SK9

6 stage, pre-calciner,

grate cooler

Road and rail

Clinker dispatch

system upgrade

90kt

(3x30kt)

Clinker silos

3 kt

Clinker

dispatchFinishing

Mills

(4x mills)

Packing

Plant

2x rotary

packers

2x

palletisers

Cement

SK8 RM

4

2 x 60kt

limestone

Quarry

limestone,

shale

Blending

Bins

GCT

Water injection

upgrade on GCT to

work with bag filter

Raw meal

extraction system

Stacker and

Reclaimer sized for

the complex

Feeds both RM4 and

RM5 raw materials

feed per millNew limestone

reclaimer and new

limestone

New weighbridge for

raw materials

Bag filter

<30mg/Nm3

RM5

Proportioning

plant

Additive

material

storage

Raw material

receiving

station

Weigh

bridge

Limestone

Reclaimer

Raw

meal

9,5kt

3 000 tpd 891 ktpd

Total Clinker

1.6mtpa

2 400 tpd 713 ktpa

Shale conveying

system

T H E S L U R R Y C O M PLEX I S A B R OW N FI ELD S E XP A N SION W H IC H C O ST ~ U S $ 70 – U S $ 9 0 /TO N N E

33


3.5 SLURRY COMPLEX OVERVIEW | 2.0MTPA CAPACITY

33

THE SLURRY COMPLEX IS A BROW NFIELDS EXPANSION W HICH COST ~US$70 – US$90/TONNE

34


3.6 PRODUCTION PROCESS

Crushing plant Kiln feed preparation and blending Coal stockpile

Coal mill

raw mill

Finish milling & dispatchPre-heater, kiln line & cooler

Limestone mining

Clinker

storage

34

35


3.7 MINING OVERVIEW

35

LIMESTONE RESERVES CONFIRMED

FOR

41 YEARS

• Crushing Plant 1000 tph capacity

• Osborn Crushers

• Earthmoving equipment

• 2 X CAT 770 haul trucks

• 7 X Heavy Construction Vehicles

(Scania)

• 3 X CAT 988 Front end loaders

• Crusher material stored on stockpiles

• Then extracted into factory by conveyor

36


3.8 MOTHBALLED KILNS DRIVE EFFICIENCY

36

Thermal energy efficiency of

Efficient Capacity2015

2018

RUNNING

ONLY THE

MOST

EFFICIENT

KILNS

SK5

SK6

SK7

SK8

SK8

SK9

Weighted average

heat consumption

of 4.5 MJ/kg

Weighted average

heat consumption

of 3.4 MJ/kg

~24% reduction

in heat

consumption

37


3.9 CLINKER PRODUCTION AND FINISHING MILLS

CLINKER

• SK8 –Capacity: 780 ktpa

• 4 stage preheater kiln

• SK9 – Capacity: 1 mtpa

• 6 stage pre-calciner kiln

FINISHING MILLS

• 2 x 30 t/h Open circuit ball mill

• 1 x 30 t/h closed circuit ball mill

• 1 x 120 t/h Ball mill, upgraded to latest

high efficiency separator technology in

2013

37

38


3.10 BAGGED AND BULK PRODUCTS

38

SLURRY PRODUCES BULK AND BAGGED

PRODUCT

• Road bulk, rail bulk and palletised-covered options

• Slurry predominantly sends bagged cement by road

in South Africa (80% bagged)

• Cement in paper and woven polypropylene bags

PRODUCTS

• Suretech (CEM I 52.5 N)

• Surebuild (CEM II /A-L 42.5 R)

• Botcem, Sureroad, Surecem (CEM II/B-L

32.5N)

39


3.11 FOCUS ON ENVIRONMENTAL MANAGEMENT

Environmental

management system

including an

environmental policy

and procedures to

manage activities that

can interact with the

environment

*Aligned to group best

practice guidelines

Our integrated SHEQ

policy stipulates our

overall intentions and

direction related to our

performance and is

aligned to the Group

Environmental Policy

Conform to ISO 14 000

standards where

Internal and external

audits are conducted

on a regular basis

Follow limits as

prescribed in the AEL

as well as the National

Environmental

Management Air

Quality Act (Act no. 39

of 2004)

39

40


3.12 PPC ALIVE | SAFETY STATISTICS FOR FY 2018

Monthly Number of employees 275

Monthly Number of contractors 120

Hours worked 1.1 Million

Lost Days 0

Number of Lti’s 0

LTIFR 0

Safety of our

employee’s

our number one priority40

41


Development of our own employee’s

Creating Employment and employ from local community

Training of local community through ABET programme

Assisting local community through sponsorships

Involved in numerous projects over wide spectrum

Local schools (Mapetla, Onkgopotse Tiro)

Day care centers (Ramatlabama, Mapetla)

Feeding scheme, food gardens

Informal settlement roads and water upgrades

Water supply project

3.13 UPLIFTING OUR COMMUNITY | A SNAPSHOT

41

QUESTIONS

4. TECHNICAL SKILLS ACADEMY (TSA)LOUIS FOUCHE – MANAGER TECHNICAL TRAINING

44


CONTENT

Brief history

Training and Accommodation facilities & capacity

Program vision and focus

TSA customer footprint

Expansion support

45


TSA (GTC) HISTORY – SOME HIGHLIGHTS

• 1976: Built first training facility – current Electrical workshop

• 1982: Admin, accommodation & Mechanical workshops added

• 1994: Conduct 1st Trade Tests

• 2005: SABS - ISO 9001:2008 Certification

• 2006: Auditorium & Block C accommodation expansion

• 2008: GTC name change to TSA

• 2010: Upgrade of Kitchen / Dining facilities

• 2014: Expansion of skills, functional competence programs & short courses

• 2015: Upgrade of Block B accommodation & “on the job” assessment facilities

• 2018: Addition of Production training & assessment facilities (In progress)

46


TRAINING FACILITIES & CAPACITY

TSA Workshop Capacity

Electrical 15 - 20 learners

Fitter & Turner 15 - 20 learners

Plater / Welder 15 - 20 learners

Production 10 - 15 learners

Auditorium 60 candidates

Lecture rooms 4 x 10 + 1 x 30

Computer room 12 candidates

47


ACCOMMODATION FACILITIES & CAPACITY

On-site

Accommodation

• 62 rooms

• DSTV

• Laundry facilities

• Dining facilities

• Recreation facilities

48


VISION – Programs Technical Skills Academy (1)

Phased Technical Training Interventions per Functional Stream

• LOGISTICS *

• Warehousing

• Transport Road and Rail

• CHEMISTRY

TECHNICIAN*

• Chemical Laboratory

Analyst

• MINERAL

BENEFICIATION

PROCESS CONTROLLER

- CALCINING*

ARTISAN PROGRAMS:

• FITTING*

• ELECTICAL *

• PLATER WELDER*

• DIESEL MECHANIC*

• ROCK BREAKING*

• Blasting Operations*

• 60 Shifts

PROCESS ENGINEERS P&L SUPCHEMIST

LAB ANALYST

TECHNICIAN*

PLANT ENGINEERS

TECHNICAL ADVISOR

MINING

• XRF

• Competency Lists in Job

Profile

• Sales and Marketing

• Rail Legal

• Loco Operator

• Shunter

• Bricking and Monolithic

• Production Simulator

• Lubrication

• Artisan Functional

• Basic Instrumentation

• Advance Welding

• Resetting

• Etc.

• Blasting Certificate

• Fall of Ground

EN

ER

GY

SA

FE

TY

AN

D R

ISK

EN

VIR

ON

ME

NT

AL

Safety and Risk

FRONTLINE OPERATIONAL MANAGEMENT INITIATIVE

Root Cause

Facilitation

Team Operational Engagement

(InvoCom)

HR / FIN /

Procurement / etc.Environment

Asset Care

FundamentalsAssessor*

Generic Engineering*

Safety Programs: Conveyor Belt Authorization / Lock Out

• Milling

• Burning,

• Stockpiling

• Silo’s

• Chemical Laboratory Assistant

• Tester – Sampling

• LAB Equipment

• Unitizing

• Silo’s

• Packing

• Palletizing

• Tankers / Weighbridge

Artisan Aid Programs:

• Fitting*

• Electrical*

• Plater Welder*

• Diesel Mechanic*

• Examine Make Safe*

• Blasting Assistant*

• Crushing and Screening

• Mobile Equipment

• Silo’s

Monitor Operate Plant and Equipment*Specific Modules: Crushing and Screening / Milling / Unitizing / Preparation Sample

1. M

ININ

G S

TR

EA

M

2. P

RO

CE

SS

AN

D E

NE

RG

Y S

TR

EA

M

3. D

ES

PA

TC

H S

TR

EA

M

4. Q

UA

LIT

Y S

TR

EA

M

EN

ER

GY

6. E

NV

IRO

NM

EN

T

RIS

K

5. E

NG

INE

ER

ING

ST

RE

AM

ENGINEERINGDESPATCHMINING PROCESS AND ENERGY QUALITY

FUNCTIONAL

SHORT COURSES

FUNCTIONAL

LEARNERSHIPS

FUNCTIONAL

SKILLS

PROGRAMS

BASIC SKILLS

PROGRAMS

INTERNSHIP

PROGRAMS

DIP’s / GRAD’s

FRONTLINE

OPERATIONAL

MANAGEMENT

COURSES

49


VISION – Programs Technical Skills Academy (2)

Functional Specialist Programs

TARGETED

POSITIONS

• PLANT ENGINEERS

• TAE’s

• TAP’s

• EXP. FOREMAN

• TECHNICAL ADVISOR

MINING

• EXP. FOREMAN

• PRODUCTION SUP

• PROCESS ENGINEERS

• EXP. FOREMAN

• P&L SUP

• EXP. FOREMAN

• CHEMIST

• SR LAB ANALYST

• EXPERIENCED LAB

ANALYST

• Process Knowledge Non

Process Engineers

• Chemistry

• Production ‘GDP’

Modules

• Process Risk within Quarry

Operation

• Mining “GDP” Modules• Product Intro to Quality

• Product Application

Fundamentals

• Effective Data Analysis

• Warehousing

• Stock Management

• Inbound and Outbound

Logistics

• Introduction to

Maintenance Model

• Feeders Function / Belt

Conv /Fans / Blowers

• Electrical Flows

• Logistics Management

• Road Transport

• Rail Transport

• Laboratory Mastery

• Accurate Data Analysis

• Concrete Durability

• Cement Usage Properties

• BI Tableau Reports

• Raw Mix Optimisation

• Quarry Environmental and

Safety

• Grinding Technology Vertical

& Ball

• Refractory

• Kiln Process and Operation

• Environment Matters

• Mechanical Inspections

• Kiln Functions and

Components

• Crushers and Storage

• Electrical Motors and Drives

• Impact on Clinker

Reactivity

• Supplementary

Cementitious Material

• Basic XRD

• Sales and Marketing

• Rail Regulations

• Process Optimization

• Kiln Coach

• AF/ARM Processing

• Energy 101

• Project Management

• Kiln System Maintenance

Down Time Analysis

• Project Management

• KPI’s

• PLC

• Mining Plan

EN

ER

GY

MA

NA

GE

ME

NT

SA

FE

TY

AN

D R

ISK

MA

NA

GE

ME

NT

EN

VIR

ON

ME

NT

AL

MA

NA

GE

ME

NT

FUNCTIONAL SPECIFIC CONFERENCES, INTERNATIONAL TRAINING, INTERNATIONAL VISITS AND BENCHMARKING

(Cement Technology, Maintenance, Quality, Mining, FLS, VDZ, etc.)

Quarry

Management

FUNCTIONAL OPERATIONAL MANAGEMENT DEVELOPMENT (DIPLOMA’s @ UNISA)

Logistics

ManagementProduction Management

Environmental

Management

Maintenance

ManagementEngineering

ManagementRisk Management

ENGINEERINGDESPATCHMININGPROCESS AND

ENERGYQUALITY

ADVANCE LEVEL

PROGRAMS

INTERMEDIATE

LEVEL

PROGRAMS

BASIC LEVEL

PROGRAMS

OPERATIONAL

MANAGEMENT

COURSES

CONFERENCES

SPECIALIST

COURSES

• The Functional Streams as per previous plus,

• Different Specialist Programs per Functional Stream for higher level positions:

• Process Risk within Quarry Operation

• Energy Management

• Environmental Matters

• Process knowledge for Non Process Engineers

• Milling Audits

• Process Optimisation

• Chemistry

• Effective Data Analysis and Interpretation

50


SA Business

PPC Cement

PPC Lime

PPC Aggregates

Readymix

Ash

Rest of Africa

Zimbabwe

DRC

Rwanda

Ethiopia

CUSTOMER FOOTPRINT

51


EXPANSION SUPPORT

Various Rwanda & DRC training initiatives successfully completed in SA:

Process operator training, legal compliance training, etc.

Establishment of satellite training centres in support of Africa expansion projects:

DRC training centre.

Rwanda options being evaluated.

SK9 process operation competence development to align with new cement technology:

Elevating current competence and knowledge of process operators & shift supervisors.

Implemented a process operator internal learnership with chemical engineering students.

Subsidiaries:

On-boarding of subsidiaries (legal training, learning material alignment, train the trainer).

CSI project support (Ulula Ash initiative).

Harare:

Harare appointments ex Bulawayo or Colleen Bawn – sufficient skills to operate milling depot.

QUESTIONS

53


INVESTOR CONTACTS

Anashrin Pillay

Investor Relations

[email protected]

+27 11 386 9000

www.ppc.co.za

53

mailto:[email protected]

http://www.ppc.co.za/

54


This document including, without limitation, those statements concerning the demand outlook,

PPC’s expansion projects and its capital resources and expenditure, contains certain forward-

looking statements and views. By their nature, forward-looking statements involve risk and

uncertainty and although PPC believes that the expectations reflected in such forward-looking

statements are reasonable, no assurance can be given that such expectations will prove to be

correct. Accordingly, results could differ materially from those set out in the forward-looking

statements as a result of, among other factors, changes in economic and market conditions,

success of business and operating initiatives, changes in the regulatory environment, other

government action and business and operational risk management.

Whilst PPC takes reasonable care to ensure the accuracy of the information presented, PPC

accepts no responsibility for any damages, be they consequential, indirect, special or

incidental, whether foreseeable or unforeseeable, based on claims arising out of

misrepresentation or negligence arising in connection with a forward-looking statement. This

document is not intended to contain any profit forecasts or profit estimates, and the

information published in this document is unaudited.

DISCLAIMER

54

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Executing on priorities in pursuit of stakeholder value heater ILC and grate cooler Slurry 2.0 mtpa...

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