SA cement producers apply for safeguards against imports

JOHANNESBURG - The Concrete Institute (TCI), representing cement producers, said on Wednesday it had applied to the International Trade Administration Commission of South Africa (ITAC) to investigate the surge in imports at low prices.

Imported cement is undercutting the industry by at least 45 percent, TCI spokesman Bryan Perrie said.

“When this is combined with unprecedented low levels of demand due to slowed economic growth, the industry is facing an existential crisis which threatens to undermine the industrial capacity of the country,” he said.

Data shows that 350,441 tons of cement arrived in South Africa during the second quarter of 2019, the most since the third quarter of 2015. Imports from Vietnam alone totalled 301,872 tons.This year to date, imports have exceed exports by over 50,000 tons.

In addition to the surge in low priced imports, TCI said a carbon tax introduced in June on the South African cement industry’s activities had increased local companies’ costs.

The effect of the tax translates into a two percent increase in selling prices, putting the South African cement industry at a further disadvantage against imports, Perrie said.

“Safeguard action would therefore be required to ensure the viability of this critical industry,” he added.

Perrie said the South African cement industry was very competitive, with more than five major producers, directly and indirectly employing thousands of South Africans whose jobs would be on the line if local production was not protected.

Companies represented by TCI include the local subsidiaries of AfriSam, Dangote Cement, Lafarge Industries and Natal Portland Cement.

Perrie said South Africa’s economy was at a crossroad and trade policy determinations would play a critical role in determining the country’s industrial direction.

“The key to future growth lies in achieving greater efficiencies within the country’s relevant manufacturing sectors,” he said.

“The cement industry must compete on a level playing field and not be scrambling to survive against low priced imports. The sector needs space to grow, which a successful ITAC application would provide.”