Cement producers target cheap Chinese imports

South Africa’s major cement producers are calling on the department of trade and industry (dti) to protect the local industry and to institute anti-dumping duties for cement imports, particularly those from China, Pakistan and India. That’s according to industry sources who say there is already an oversupply of local cement. “And now we have to compete with cheaper products from the Far East,” said one local producer. Market researchers Frost & Sullivan, in their study ‘Southern African Cement Industry Production and Investment Forecasts’, predict that US$940 million will be invested in the cement industries of three countries – South Africa, Zambia and Zimbabwe – between 2013 and 2018. According to their figures, cement production stood at 14.9 million tonnes in 2012 and is expected to reach 18.1 million tonnes in 2018 – owing to the addition of new cement manufacturing plants in South Africa, Zambia and Zimbabwe. “By 2018, these projects will increase cement production capacity by another 5.1 million tonnes,” the report states. In early 2014, another local competitor will enter the market when Nigerianowned Dangote Cement opens in Aganang in the North West province, adding 1.5 million metric tonnes to South Africa’s capacity, according to a statement from the Dangote group. “The ships from the Far East flood the market with a cheaper – and some say inferior – product and the local producers are forced to find alternative markets outside of South Africa’s borders to get rid of excess stock,” a cement manufacturer told FTW. Cement is exported to other African countries at discounted prices, he added. “Three quarters of the price is the high transport costs which escalate cross-border due to border delays and poor infrastructure,” he said. Many in the local construction industry – one of the biggest markets for cement and aggregate products – will not use imported cement products, even though they carry the South African Bureau of Standards (SABS) stamp of approval because they believe it is an inferior product, according to our source. “But a lot of the other industries that use cement do not rely on such a delicate and accurate mixture and are therefore happy to use the cheaper product,” he said. “In order to diversify and survive the overcapacity challenge in South Africa, some cement producers are exploring the option of expanding operations further into Africa, particularly sub- Saharan Africa, including east and west Africa.” In October this year, Ketso Gordhan, chief executive of PPC Cement, announced the company’s intentions to invest in a US$230 million factory in the Democratic Republic of Congo (DRC). The Business Report also recently reported Afrisam chief executive officer Stephan Olivier as saying that the company planned to expand in the rest of Africa after overhauling its debt. CAPTION Cement workers at a manufacturing plant in the North West province ... cheap imports threating sustainability.