Mergers are supposed to enable organisations in the same niche market but different specialties pool their resources together and create a bigger and better entity.
But former CEO of PPC, Paul Stuiver, questions whether the impending merger between his former employer, PPC, the biggest cement producer, and the second largest producer, Africam makes business sense.
Stuiver says: “Because the organisations are so similar there is no synergy. It would make PPC twice as big as it is in the South African market, which is oversupplied and likely to remain oversupplied in the next five to six years.”
Instead, he says, the best move would be for PPC to focus growing its business footprint in Africa, which is proving to be a lucrative growth avenue for some ambitious South African businesses.