de hoek site visit 24 september 2018 slurry site ... - donuts heater ilc and grate cooler slurry 2.0...

Executing on priorities in pursuit of stakeholder value

DE HOEK SITE VISIT 24 SEPTEMBER 2018

SLURRY SITE VISIT 27 SEPTEMBER 2018

2

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

4


1.1 SUPPLY DEMAND DYNAMICS

4

-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

5


1.2 PLANTS IN SOUTH AFRICA | MODERNISED

5

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

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

6


1.3 THREE MEGA PLANT STRATEGY CAPITALISES ON OUR

FOOTPRINT

6

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:

• In tegra ted p lan ts and

depots to serve

key marke ts

• Blend ing fac i l i t i es c lose

to the marke t

• Por t fo l io e f fec t

de l i ve r ing p ro f i tab i l i t y

• Abi l i t y to de l i ve r a t

lowes t cos t th rough

op t imal sourc 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

7


1.4 PPC STRATEGIC RESPONSES TO MARKET FACTORS

7

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

8


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

8

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

9


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

2. De Hoek SITE VISIT

11


2.1 DE HOEK TEAM

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

Johan VorsterGeneral Manager

BSc, MBA (9 years)

Johan SteynB-Com, MBA, Dip Tax,

Charted Management

Accountant (18 years)

Annetjie MinnaarRisk Manager

B-Tech Safety Mng (14

years)

Michael DanielsProduction Manager

BSc, (Hons) (17 years)

Jaco JoubertEnvironmental Manager

M Tech : Env Health, ND

Safety Mng (22 years)

Adele StoneQuality Assurance Manager

NHD Microbiology (29

years)

Jan VorsterHuman Resources

Manager

BS, (Hons): DPLR (27

years)

Vincent DiergaardtMining Manager

B-Tech Mining Eng

(12 years)

Steven StraussEngineering Manager

N Dip, GCC (11 years)

11

12


1919 Lime Company discovered limestone at De

Hoek

1923 Cape Portland Cement took over and began production

with one kiln

The company continued to trade under this name until 1983 when

the name changed to Pretoria Portland Cement

160 Feet long, (49 m)

Diameter of 9 feet, (2.7m)Limestone transported

with trolleys to the factory

12

2.2 DE HOEK HISTORY

13


2.3 DE HOEK OVERVIEW

Mining

Factory

Village

Dispatch

Vondeling Pit

Zoutkloof Pit

13

14


2.4 PRODUCTION PROCESS

Crushing plantKiln feed preparation and

blendingCoal stockpile

Coal mill

raw mill

Finish milling & dispatchPre-heater, kiln line & cooler

Limestone mining

Clinker

storage

14

15


• Commenced during 1979/80

• Planned mining until end 2017

• Final depth 190m

2.5 MINING | ZOUTKLOOF PIT & VONDELING PIT

15

16


2.6 MINING | SCREENING, STOCKPILING, CRUSHING AND

RECLAIMING

2 x Secondary crushers (Impact)

Transportation via a 4 km belt

conveyor underneath the N7 to the

plant

Semi-mobile Primary Crusher (Cone)

Move once in 3-4 years for maintenance

Takes 1 day to travel to the service area

Raw materials

Mined on site 91% Limestone

1,5% Shale

External Supply 5% Sand

6-10t/hr Coal

2.5% FDG (Fe)

Product extender 9 - 37% Slag

3% Gypsum

7-15% Limestone

16

17


2.7 CEMENT ASSET PORTFOLIO IN SOUTH AFRICA |

COASTALRIEBEECK

Clinker

• DK5 – Capacity: 310 kt

• 4 stage preheater kiln

• DK6 – Capacity: 460 kt

• Upgraded in 2012


• RK1 –Capacity: 240kt

• Long dry kiln

• RK2 – Capacity: 270kt


Finishing Mills

• FM 5 – 65 tph

(Unblended cement)

• Open circuit ball mill

• Commissioned in 1972

• FM6 – 60 tph (OPC)

• 2nd Generation closed

circuit ball mill

• All product ranges

• FM 1 – 32.5: 32tph

• Open circuit Unidan

mill

• FM 2 – 32.5: 57tph;

52.5:28tph

• Open circuit Unidan

mill

• All product ranges

GEORGE

• Warehouse and bulk cement

distribution

PE FM4

• 30t/h (OPC) Open Circuit Ball Mill

with KHD Roller Press Pre-

Grinding Circuit

DE HOEK

RIEBEECK

17

18


2.8 KEY EQUIPMENT

18

19


Two packing machines 2 900 bags p/h each

Bulk loading facilities by road and rail

Cement storage capacity = 20 000 tons

We can pack in excess of 1.4 million bags of cement per month

De Hoek can sell approximately 26 000 tons of cement per week

2.9 PRODUCTS PACKAGING AND LOGISTICS

19

PRODUCTS

• Suretech (CEM II 52.5 N)

• Surebuild (CEM II 42.5 N)

• Surecast (CEM I 42.5R)

20


2.10 WATER SAVINGS INITIATIVES

• Geophysical Survey: Determine Underground Water Source

• Desalination Plant 40m³/h (Raw Water from old Quarry convert to

20m³/h drinkable water)

• Employees staying in village reduce water consumption from

150 litres to 80 litres per person

• Overall plant consumption reduce water consumption by 60%

20

21


2.11 ALTERNATIVE FUELS | TYRE BURNING

229 422

1 275 2 069

6 637

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

FY15 FY16 FY17 FY18 FY19

TONS TYRES PROCESSED

Actual Forecast

21

22


2.12 ENVIRONMENTAL | MINE REHABILITATION

End use for mining area is agricultural activities

Rehabilitated 9.5 ha during 2018

Wheat planted

Backfilling Zoutkloof pit

Use overburden from new Vondeling pit

Already filled ¼ of the pit

Concurrent rehabilitation costs approx. R1.5m per annum

22

23


2.13 PPC DE HOEK SHEQ PERFORMANCE

INTEGRATED SHEQ MANAGEMENT SYSTEM

Quality Management System

Environmental Management System

Health & Safety Management System

Bag mass e-mark

Energy Management System

HIV/AIDS Management system

WE ARE CERTIFIED IN THE FOLLOWING

STANDARDS

ISO 9001

ISO 14001

OHSAS 18001

SANS 184123

24


Wittewater Water project - phase 1

& 2

Porterville Youth

Centre – launch June

2018

Mini Science Lab to Steynville Secondary School

2.14 PPC DE HOEK CSI AND SLP ACTIVITIES

Mr Saal

and

Kabira Akoob

(PPC Group CSI

Manager), sign a five

year contract

24

QUESTIONS

3. SLURRY COMPLEX SITE VISITFRIKKIE VAN ZYL – GM SLURRY

COMPLEX

27


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

27

28


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

28

29


3.3 SLURRY COMPLEX AERIAL VIEW

Village

Despatch We are here

29

30


3.4 SLURRY COMPLEX OVERVIEW | 2.0MTPA CAPACITY

30

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

31


3.5 SLURRY COMPLEX OVERVIEW | 2.0MTPA CAPACITY

31

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

32


3.6 PRODUCTION PROCESS

Crushing plantKiln feed preparation and

blendingCoal stockpile

Coal mill

raw mill

Finish milling & dispatchPre-heater, kiln line & cooler

Limestone mining

Clinker

storage

32

33


3.7 MINING OVERVIEW

33

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

34


3.8 MOTHBALLED KILNS DRIVE EFFICIENCY

34

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

35


3.9 CLINKER PRODUCTION AND FINISHING MILLS

CLINKER

• SK8 –Capacity: 780 ktpa


• 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

35

36


3.10 BAGGED AND BULK PRODUCTS

36

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)

37


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)

37

38


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 priority38

39


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

39

QUESTIONS

41


INVESTOR CONTACTS

Anashrin Pillay

Investor Relations

[email protected]

+27 11 386 9000

www.ppc.co.za

41

mailto:[email protected]

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

42


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

42

de hoek site visit 24 september 2018 slurry site ... - donuts heater ilc and grate cooler slurry 2.0...

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