For much of the past decade, cement producer PPC’s weakening performance was not denied — it was explained, even excused. And over time, explanation became insulation.
In June 2018, then CEO Johan Claassen characterised the group’s results as “a resilient performance against the backdrop of quite a challenging environment,” adding that “it’s probably very safe to say that it’s one of the first times that we can say that our portfolio is bearing fruit”.
Performance pressure was acknowledged, but responsibility was displaced — into macroeconomic weakness, construction cycles and the timing of new plants still “ramping up”. This framing persisted across subsequent disclosures.
Underperformance was narrated as temporary and contextual, not structural or self-inflicted. What is striking in the integrated reports and earnings calls between financial 2018 and financial 2023 is not what is said, but what is not.
There was no explicit admission that internal execution, leadership capability or decision discipline were the primary causes of decline. Even when then CEO Roland van Wijnen warned in October 2020 that companies fail because of “corporate arrogance, lack of purpose and an insufficiently strong balance sheet”, the comment was framed as a general lesson — not as PPC’s diagnosis.
Throughout the mid-2010s, PPC committed to multiple large-scale cement projects beyond South Africa at a time when its operating base was already under strain. Under then CEO Darryll Castle, the expansion was framed as the payoff phase of a long investment cycle.
In November 2016, Castle told investors that PPC was “at an inflection point”, arguing that “most of the heavy lifting has been done” and that the focus would now shift from building capacity to extracting value from it. Integrated reports from this period echo that confidence, describing Africa as a growth platform and emphasising that the group was nearing the end of its capital cycle.
What those disclosures did not demonstrate was that returns on invested capital in the core business were already under pressure, operational consistency varied widely across plants and governance systems were being stretched by the complexity of running start-ups across multiple jurisdictions.
The assumption was that scale and geographic diversity would ultimately smooth out volatility and lift returns. Instead, complexity multiplied faster than capability. Ultimately, PPC found itself managing an enlarged footprint without a stabilised core — a classic case of growth amplifying weakness rather than curing it.
What earlier leadership implied through impairments and technical disclosures, current CEO Matias Cardarelli has since stated without qualification. Reflecting on PPC’s historical capital allocation, he says: “None of these investments [in the 2010-2015 period] — Ethiopia, DRC [the Democratic Republic of Congo] or Rwanda — ever created value. All of them delivered negative returns on capital, and in the case of the DRC, it remains the single largest bad decision on capital allocation made in PPC’s history.”
That level of candour marks a decisive break from the language of his predecessors. None publicly characterised those investments as value-destructive errors. Cardarelli does — and goes further, explaining why they proved so hard to unwind: “By the time this was realised, the financial commitments, the leverage tied to those assets and the complexity of the debt structures and guarantees led to a long exit process.”
What had previously appeared as accounting outcomes — writedowns, restructurings, risk notes — is recast as a systemic failure of capital discipline. In Cardarelli’s own diagnosis, value erosion persisted because “the assumptions, data integrity and business fundamentals behind them were incorrect or incomplete”.
What earlier leadership framed as a source of cohesion, Cardarelli later identified as a structural performance risk. For much of the preceding decade, PPC’s culture was described in affirming, almost pastoral terms — purpose, teamwork, legacy, pride in people — language that soothed strain but blunted scrutiny.
Under Van Wijnen, culture was explicitly cast as an asset already in place. In November 2019, he told investors that PPC had “a strong asset in our people base” and spoke of “a deeper purpose … the reason that we get out of bed in the morning”. The implication was clear: culture was something to preserve, not interrogate.
PPC tolerated patterns that signalled detachment rather than discipline: senior leaders attending non-value-adding conferences, flying first class, and staying in five-star hotels while margins compressed and capital returns deteriorated. That behaviour tells the organisation that cost pressure is something that happens only below the executive floor. Over time, this normalises mediocrity: if comfort persists despite underperformance, results become optional while privilege does not.
Cardarelli encountered a moment that crystallised the old PPC culture in much the same way Whitey Basson once experienced at Shoprite. On his first day, Basson famously walked into the executive dining room and said: “You guys know the story of The Last Supper? Well, this is the last lunch. Today we’re shutting down this cafeteria, and tomorrow you’re bringing your own sandwiches for lunch.”
Cardarelli faced a parallel reckoning. Shortly after arriving at PPC, he was hosted for a formal three-course executive meal at a cement plant clubhouse, a practice that had long been accepted as normal. Like Basson, he recognised the symbolism immediately. In a business fighting for margins, such privilege was incompatible with credibility. The practice was stopped.
When Cardarelli later observed that PPC was widely regarded internally as a “family”, it was not a compliment. In corporate settings, the language of family is rarely neutral: it signals the replacement of professional accountability with emotional obligation. Loyalty begins to outrank competence. Difficult conversations are deferred to preserve harmony. Underperformance is tolerated because it feels disloyal to confront it.
This is precisely the failure mode Cardarelli named directly in June 2025, when he stated that PPC’s decline was “aggravated by a complacent organisational culture, lack of ownership across the teams”. What had once been celebrated as togetherness is reframed as a system that blurred accountability.
The contrast is stark and evidential. Where previous CEOs spoke of culture as identity — something that PPC was — Cardarelli treats culture as an operating system: something PPC does.
He restores a harder, more professional contract: respect is earned through delivery, not tenure; belonging does not excuse underperformance; and accountability is not cruelty but clarity. Cardarelli is turning culture from a shield into a lever, and from sentiment into discipline.
The first proof that the PPC turnaround was real did not arrive with confidence, commentary or upgraded guidance. It appeared quietly. Margins improved before volumes recovered. Cash flow strengthened while demand remained uneven. Capital discipline became visible not only in what was approved, but in what was declined. These were not cosmetic wins or accounting effects; they were behavioural fingerprints.
It must be pointed out that true turnarounds do not wait for the economy’s permission. PPC’s recovery began in an environment that offered little external help: muted construction activity, persistent imports, constrained infrastructure spending.
And yet results improved. The gains were internal. By prioritising margin over volume, cash over explanation and return on capital over expansionary ambition, the company decoupled its performance from the cycle. Cyclical recoveries flatter management; internal recoveries test it. When results improve in spite of the environment, they tend to endure when the environment eventually turns.
The inside story
The most consequential moment in PPC’s revival was not a refinancing, an impairment or a market recovery. It was a diagnosis that cut directly against more than a decade of institutional habit. When Cardarelli arrived, he concluded that PPC had “normalised underperformance by attributing the financial performance decline to external factors”, while “the real issues were inside the business”.
His indictment is precise and, for corporate South Africa, unusually blunt: “Wrong people in key positions; lack of basic managerial information to run the business … key managerial data was incomplete, inconsistent or simply not trusted; lack of understanding of the fundamentals of our business; and a complacent organisational culture, where friendship and internal alliances were more important than delivering value for shareholders.”
Previous leadership language had consistently framed PPC’s struggles as cyclical, macro-driven or timing-related. Cardarelli did not deny those pressures, but he stripped them of explanatory dominance, arguing that “our performance over the past 18 months has demonstrated unequivocally that they were only part of the challenge”, and that “internal performance was clearly the main factor behind the collapse of PPC over the past 10 to 15 years”.
Crucially, this reframing was informed by an inconvenient comparison: cement producers in markets far more severely oversupplied than South Africa, including Egypt and Brazil. Oversupply, in other words, was a constraint, not a verdict.
By naming PPC as, in his words, a “broken organisation” from a culture and leadership perspective, Cardarelli forced a reckoning that earlier CEOs had avoided. The turnaround did not begin with optimism or reassurance, but with the admission that the problem was not outside the gates. It was structural, behavioural and self-inflicted — and therefore, for the first time in years, controllable.
What ultimately distinguishes PPC’s turnaround is the presence of hard proof points that anchor diagnosis to action.
First is the acknowledgment of board misguidance. Cardarelli has stated that the board had been “significantly misguided by previous management teams”, a blunt admission that explains why decline persisted despite governance structures ostensibly being in place. This reframes earlier oversight failures not as negligence, but as information asymmetry — a board operating on incomplete or distorted signals.
Interestingly, across the period of PPC’s decline, chair Jabu Moleketi’s commentary reflects continuity of governance rather than authorship of turnaround. From 2020 to 2023, his reports are dominated by external context. The inflection comes in financial 2024/2025, when the chair’s language shifts decisively from reassurance to endorsement of a reset led by management. His FY2025 report marks the board’s acceptance of execution-led discipline as the organising principle of recovery.
Second is the primitive state of management information Cardarelli uncovered on arrival. He has described situations where PPC “couldn’t even quantify some of the issues” because data was incomplete, inconsistent or untrusted — a level of informational fragility incompatible with a capital-intensive industrial business.
Finally, the reset is validated by the case of PPC’s Western Cape (RK3) plant. Unlike earlier African investments, RK3 was executed under strict capital discipline, experienced leadership and rigorous governance, delivering a lower cost base and improved environmental performance.
RK3 is evidence that when assumptions are sound, data is trusted and accountability is enforced, PPC can deploy capital successfully. Together, these three proof points — board clarity, data integrity and disciplined execution — convert the turnaround from intent into demonstrable fact.
Leadership expert John Maxwell’s maxim that transformation begins by “getting the right people on the bus” is not a cliché at PPC.
One of Cardarelli’s explicit conditions for joining PPC was the freedom to build his own executive team, and the sequencing of appointments shows how deliberately that mandate was exercised. Within months of his arrival in December 2023, the leadership architecture changed decisively: a new COO (Ernesto Acosta, January 2024) with deep cement, engineering and turnaround credentials; a chief strategy officer (Paulo Marques, January 2024) with capital discipline and restructuring expertise; a head of strategic investment and projects (Horacio Ardiani, February 2024) with extensive experience in complex international projects; and a chief revenue officer (Bheki Mthembu, November 2024) with end-to-end commercial and operational experience. These roles did not previously exist in this form.
By contrast, the prior executive configuration was stable but inward-looking: long-tenured leaders appointed between 2015 and 2018, with strong institutional knowledge but limited evidence of having arrested decline while complexity and capital misallocation intensified. Continuity became preservation.
Under Cardarelli, continuity is broken by design. Weekly six-hour executive sessions replace monthly oversight rhythms, operational fluency replaces narrative reassurance and accountability is embedded through role clarity rather than collegial balance.
Talk is not cheap
What ultimately unlocked PPC’s turnaround was also what made it most uncomfortable: sustained, unfiltered honesty — delivered repeatedly, and to everyone.
After diagnosing the reason for PPC’s underperformance, Cardarelli did not confine it to a slide deck or a results call. He took it directly to the people who had to live with it.
The first step, he explains, was “to speak openly and transparently about these huge problems with the board, with employees and with shareholders”. These were not symbolic engagements. Cardarelli describes extended, often confrontational sessions — in some cases lasting up to two full days — in which the same hard truths were laid out repeatedly.
The response was not immediate alignment. “These conversations were uncomfortable at times,” he says, adding that the leadership team “faced mistrust and even in some cases personal defamation attacks”. Resistance was institutional as much as personal. Most of the organisation, he says, had grown “comfortable with the status quo”, and the old explanatory language had protected reputations and routines alike.
What changed was not just the message, but the cadence of accountability. Historically, the exco met once a month; under the reset, executive directors now meet weekly to interrogate performance, execution and decisions in real time.
Cardarelli understood that without this intensity, candour would decay back into reassurance. “Transparency,” he says, “is pivotal to create the grounds needed to start the turnaround process.” Only once honesty was repeated often enough and publicly enough did resistance give way to credibility — and change become possible.
The pause that refreshes
Before PPC could be repaired, it had to be stopped. One of Cardarelli’s earliest — and least visible — interventions was not an investment or a restructuring, but a pause.
Confronted with a pipeline of capital projects built on “incorrect or incomplete” assumptions, unreliable data and weak understanding of business fundamentals, management froze most discretionary capex in its first year. Cardarelli says: “We reset everything, reran the numbers, rebuilt the business cases and forced proper challenge and transparency into the process.”
This was a decisive break from prior practice, where momentum and precedent had often been substituted for discipline. The freeze exposed how deeply the organisation had drifted: multiple software systems performing the same functions, external advisers defining needs the business itself could not articulate and an accumulation of “nice-to-haves” that inflated spend without improving returns.
Crucially, stopping investment was not an act of austerity but of control. In a capital-intensive business, continuing to deploy capital through a broken decision system only compounds failure. By halting decisions first, PPC created the space to rebuild management information, restore trust in data and re-establish capital discipline before spending resumed. The logic was simple and unforgiving: you do not accelerate when the instruments are unreliable.
Arguably, the most durable element of PPC’s recovery began with a reframing that was deceptively simple but strategically profound: the recognition that PPC is, at its core, a cement and logistics business. That insight exposed how far the organisation had drifted from first principles.
Cement margins are not made only at the kiln; they are earned — or lost — in how efficiently product is moved to market.
Under Cardarelli, operational focus has returned to plant reliability, energy efficiency, clinker optimisation and cost per ton, executed through a multiyear plant performance improvement plan. Variability that had long been tolerated was surfaced and attacked systematically. Equally revealing were commercial practices that had quietly hollowed out margin.
In Gauteng, PPC was selling cement through an intermediary buyer rather than directly to customers — an arrangement that simplified volumes but surrendered value on every ton. This was seen to be emblematic of a business that no longer fully understood its own economics. That structure was unwound. At the same time, logistics — long outsourced and loosely controlled despite being mission-critical in a heavy, low-value-to-weight product — was pulled back in-house.
Route control, fleet utilisation and delivery reliability were restored as management levers rather than external costs. The message was explicit: without logistics control, there is no cement competitiveness. In an industry where fixed costs are high and mistakes compound slowly but brutally, rebuilding the operating core around cement and logistics fundamentals was seen as essential.
Driven by incentives
For years, PPC’s incentive architecture diluted responsibility by rewarding proximity, effort and explanation alongside results. Only 40% of performance assessments were anchored in financial outcomes, while the remaining 60% relied on diffuse, subjective inputs that attempted to measure effort rather than delivery.
The reset came when that elasticity was removed. Under Cardarelli, metrics replaced narratives as the company’s governing language. Incentives were stripped of interpretation and re-anchored to outcomes that could not be negotiated: margin discipline, cash generation, return on capital. These were no longer reporting artefacts; they became behavioural contracts. Compensation, credibility and capital approval began to move in the same direction.
Once individuals understood that rewards followed performance rather than persistence, behaviour recalibrated. Projects were scrutinised harder. Costs were challenged earlier. Meetings shortened. Excuses thinned. Decisions hardened, taken with the knowledge that intent would no longer protect outcomes.
Accountability became real not because leadership demanded it, but because the system made avoidance impossible. That is why this phase mattered more than any slogan. Metrics did what motivation never could.
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