PPC talks with authorities again about imports

CEMENT and lime producer PPC has said that it was engaging with government authorities again about cement imports into South Africa, which increased 80 percent in the 11 months to November last year, compared to the prior corresponding period.

The company said yesterday that the engagements were meant to ensure the sustainability of the domestic industry and market stabilisation.

It said cement imports into Cape Town increased by 48 percent to 209 000 tons in this period, but was still substantially lower than the majority of imports into Durban, which increased by 84 percent.

South Africa’s cement industry previously faced a challenge from imports from Pakistan, which dropped significantly after the imposition of anti-dumping duties by the International Trade Administration Commission.

However, the industry was then confronted by a new import challenge from Chinese cement producers.

Construction market intelligence firm Industry Insight reported in December that cement imports increased 166.4 percent year-on-year in September and 144.1 percent in October. It said these imports were mainly from Vietnam and Pakistan, with no cement imports reported from China since June last year.

The firm said total cement imports for the first 10 months of last year grew by 104.7 percent to a total of 849 781 tons, compared to the same period in 2017.

This meant 434 673 tons more cement were imported in this 10-month period last year than in 2017, it said.

PPC added that despite difficult trading conditions in the nine months to December, average cement prices in southern Africa, including Botswana, increased by between 1 and 2 percent.

However, cement volumes were down by between 2 to 3 percent to December, against the backdrop of an estimated market contraction of between 4 and 5 percent.

PPC said price increases of between 8 and 12 percent were implemented on January 15 in certain regions, and it intended to maintain the price increases implemented as the business continued to focus on achieving its R70-a-ton profitability initiatives.

Commenting on its Zimbabwean operations, PPC said the impact of the fuel and cost of living increases had placed consumers in the country under strain and was expected to impact its earnings before interest, tax, depreciation and amortisation (Ebitda) margins by between 1 and 2 percent.

However, PPC said it was envisaged that cost-saving measures would ensure that Ebitda margins remained within previously guided ranges.

The company said volumes in Zimbabwe grew by low single digits compared to the prior period last year because of operational challenges experienced in the third quarter of its financial year.

PPC shares rose 0.36 percent on the JSE yesterday to close at R5.65.