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At 575c, the share price of Pretoria Portland Cement (PPC) is about a 10th of the R51 it hit nine years ago. Afrisam, acquired in a debt-laden R23bn deal in 2007, is bleeding jobs and struggling to survive. Both entities have since sucked up billions in shareholder bailouts. Yet there is still no light in the cement tunnel.

The exuberance that propelled inexperienced industry outsiders to wage a bitter political and public relations battle to secure control of the SA operations of Holcim at the top of the market is long gone.

That company, now called Afrisam, has since restructured its debt pile numerous times and received a few bailouts from the Public Investment Corp (PIC).

That was the part that it could control.

What Afrisam could not control was the entry of two new competitors into SA: Sephaku Cement and Mamba Cement. That increased total national capacity to more than 20Mt. But demand last year was about 13Mt — 2Mt lower than demand at the peak in 2007. And cheap imports from Asia have only worsened the situation.

After buying most of Afrisam’s debt and converting it into equity, Phuthuma Nhleko’s Pembani Group became a 30.5% shareholder in the company in 2011. The PIC has a 68% holding, which was also converted from the debt that was choking the cement maker.

The PIC has poured billions more of pensioners’ money into Afrisam, but this has only helped delay the inevitable. The company is being choked by the depressed building and construction market. So are all its competitors.

In another attempt to cling to life, Afrisam has undergone a deep restructuring process, now nearing its end, that cost jobs. Exactly how many jobs are being lost in the retrenchment drive, I do not know. Afrisam has hidden behind its privately owned status in declining to divulge that information, but people in the know say it’s "a significant number".

After PPC, Afrisam is SA’s large st cement producer . An Afrisam-initiated merger attempt with PPC last year did not go very far. That, too, was a desperate attempt at survival. (Whether or not the proposed merger would have passed anti-trust scrutiny is another story.)

The bruised egos in the PPC boardroom quickly did away with Afrisam’s advance without so much as asking the owners of the company for their views.

Yet the PPC board didn’t hesitate to run to the same investors with a begging bowl when they got stuck.

Crippled by deep financial constraints, Afrisam was in no position to launch any hostile takeover.

Last month PPC raised R4bn in a deeply discounted and oversubscribed rights issue. This was necessary, as it was squeezed on all sides — by a heavy debt load on the one, low revenues on the other, and capital tied up in capital infrastructure projects in countries such as Zimbabwe and Ethiopia.

The capital it raised restored PPC to the R9bn market capitalisation level. But it’s far from enough to restore the company’s finances to any level of stability. Before the rights issue, its debt was hovering at about R10bn. Today, it is still rising.

The single largest investor in both companies is the PIC, which means ordinary teachers and police officers’ pensions are on the line. As such, it is in the PIC’s interests to stitch together a combination.

The current market makes the kind of transaction that Afrisam had in mind when it initiated the merger worthwhile to pursue once more. It would be a wise move. A combined entity would enjoy a dominant market share, which the competition authorities could reduce by insisting on some plants being sold. However, there are a lot of beneficial synergies that the combined entity could offer. Importantly, a joint effort at management level would have quite a say in reducing the cement volumes flooding the market right now.