PPC's poor performance goes beyond tough economic conditions

With fiercely growing competition and the presence of a protracted slowdown in the South African construction sector, Pretoria Portland Cement or better known as PPC Ltd. has yet to convince stockholders of it's intended recovery in progress as it reported another dismal set of half year earnings that were largely filled with higher financing costs.  

PPC's main competitor and relatively new entrant Sephaku Cement has grabbed a considerable size of the market share with the backing from well-known Nigerian cement producer, Dangote Cement owned by Africa's richest man, Aliko Dangote. The South African company's failure to reap a decent return from their expansion into the African continent and seemingly losing out on it's market dominant position in it's home country does point to a poor execution of strategy by it's management.

PPC Earnings Slump After Cement Maker’s Financing Costs Surge https://t.co/4Zw4iyarxk

— Tom Robbins (@BaragwanathBiz) November 16, 2016

Who can forget the publicly aimed spat the company's board had with former CEO Ketso Gordhan over his intentions to get rid of Chief Financial Officer Tryphosa Ramano for reason that weren't compelling to the board.

Gordhan's focus on cutting back on cost fell in line with the efforts made by current CEO Darryl Castle and in hindsight it's recognised that Gordhan's mission wasn't flawed when assessing the performance of the company after his departure.

What it does highlight is the impact such event can have on a company and in the case of PPC, occurring at a crucial moment in the company's esteemed history being faced with a tougher economic environment than usually experienced and the need to find new avenues to take advantage of Africa's growth engine all of which management has failed to do.

Had management left their ego's outside the boardroom they perhaps would've been better equipped to see the risks that lay ahead at that particular moment and concentrate their energy on protecting their market share instead of finding ways to line their pockets.