Imported cement ban

…Sephaku gears up for dozens of govt projects, confirms kiln recovery

JOHANNESBURG - JSE-listed Sephaku Cement, a subsidiary of the Nigerian group Dangote Cement, saw its share price surge by 26 percent on Tuesday. Its share price has now gained 460 percent since a year ago.

Like other cement producers, including PPC (+6 percent), its share price gained from the news that National Treasury would move to ban the use of imported cement for the construction of public infrastructure projects.

Late on Tuesday, the company also confirmed that a kiln outage was also resolved.

In a statement released late on Tuesday, the company said that Treasury's circular prescribes that all government institutions and state-owned enterprises must stipulate in tenders that only South African-produced cement will be permitted for construction.

"This decision has resulted in a significant rally in the share price due to the 50 planned government infrastructure strategic integrated projects and 12 special projects as part of a drive to stimulate the economy," the notice said.

Sephaku said the Infrastructure Fund reported that it had submitted four projects worth R21 billion for National Treasury approval and will contribute R5.4 billion through finance from both public and private resources.

"The projects have supposedly been approved by Infrastructure South Africa, which is tasked with overseeing the government's Infrastructure Investment Plan. The Fund is apparently finalising four more projects valued at approximately R85 billion for submission in 2022," the notice said. Sephaku said its subsidiary, Métier Mixed Concrete, had a plant footprint in Gauteng, Mpumalanga and the Western Cape to compete for the supply of concrete into these strategic infrastructure projects.