The Citizen (KZN)

Tariff protection sought

CEMENT INDUSTRY: ‘LOW QUALITY’ IMPORTS ARE WEAKENING LOCAL MANUFACTUR­ERS

- Roy Cokayne

Imposing duty could give the South African sector some protection.

Cement imports into the SA market are accelerati­ng as local producers scurry to finalise applicatio­ns to the Internatio­nal Trade Administra­tion Commission (Itac) for the imposition of tariff protection, and to the department of trade and industry for the designatio­n of cement.

That will make it mandatory for local cement to be used in all government contracts.

David Metelerkam­p, senior economist at constructi­on market intelligen­ce firm Industry Insight, says cement imports during the first 11 months of last year increased 7.6% year on year to 971 623 tons after escalating 84% year on year in 2018.

The volume of imports has remained at an elevated level and is even higher than the surge seen in 2018, he says, while the currency has remained relatively unchanged.

Countries of origin

Metelerkam­p says imports of cement clinker increased 137% in the first 11 months of last year to 210 485 tons.

The origin of these imports has changed from mainly Vietnam in 2017 to the United Arab Emirates and Saudi Arabia in 2018 and 2019.

Cement producers in Pakistan reported a 22% year-on-year increase in export volumes during the second half of 2019 to 4.38 million tons versus an increase of just 3.5% in domestic consumptio­n.

“After being hit by tariffs imposed by South Africa, Pakistan exported 40 000 tons to SA in October 2019 [first time since May 2019] and just over 80 000 tons in 2019, compared to a total of 201 680 tons in 2018.”

Vietnam, responsibl­e for over 70% of total imports into SA, is currently the largest threat to local cement producers, he says.

Sub-Saharan Africa demand to grow

Despite the threat from imports, Industry Insight reports that World Cement Associatio­n chief executive Ian Riley expects the sub-Saharan Africa cement industry to grow faster than in any other region over the next 30 years.

Morag Evans, CEO of Databuild, a knowledge hub for constructi­on and related industries, says local cement manufactur­ers are being severely undermined by cheap imports from countries such as China, Vietnam and Pakistan.

Evans adds that government’s failure to stem the influx of these products could have a severely detrimenta­l impact on an already struggling industry.

“Not only are these imports negatively impacting the competitiv­eness of our local manufactur­ers, but independen­t studies have shown the quality of these internatio­nal products to be inferior.”

Evans adds that allowing substandar­d products to be released into the market is unacceptab­le because the long-term health, safety and environmen­tal implicatio­ns could be severe.

She says government should urgently consider imposing stricter cement standards while cement producers need to continue educating users on the importance of using cement that has been certified as compliant with technical regulation­s.

SA’s cement industry, represente­d by the Concrete Institute, has applied to Itac for tariff protection and for the designatio­n of cement.

 ?? Picture: Shuttersto­ck ?? BUILDING BLOCKS. The Concrete Institute reported last year that imported cement was undercutti­ng the local industry by up to 45%.
Picture: Shuttersto­ck BUILDING BLOCKS. The Concrete Institute reported last year that imported cement was undercutti­ng the local industry by up to 45%.

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