Cheap cement imports crippling local industry
Local cement manufacturers are being severely undermined by cheap imports from countries such as China, Vietnam and Pakistan. Government’s failure to stem the influx of these products could have a severe detrimental impact on an already struggling industry, says Databuild CEO Morag Evans.
“In an industry already in the grips of a severe downturn owing to the decline in infrastructure development, 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 cites a recent investigation conducted by PPC Cement, which revealed extensive contravention of cement quality regulations. “According to the report, of the 14 products tested from ten different producers, most were either over or underweight and of inconsistent quality.
“Allowing sub-standard products to be released into the market is unacceptable, as the long-term health, safety and environmental implications could be severe, to say the least. Consequently, 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.”
The Concrete Institute’s petition to government to impose 45 per cent import tariffs on cement imports could go a long way toward protecting local manufacturers from cheap imports, Evans continues.
“Tariff restrictions have worked in the past,” she points out. “Imports from Pakistan declined in 2016 following the implementation of between 17 and 70 per cent import duties in 2015.
“The risk of such a move, however, is that it could lead to an upsurge in the price of cement and ultimately increase inflation, which would not bode well for the country’s economic growth.
“South Africa has numerous cement-producing plants which are more than capable of keeping up with local demand. Government should therefore work to protect these assets by helping manufacturers focus on increasing their export figures, but with 158 of the world’s 195 countries producing cement, this could prove challenging.
“At a time when South Africa’s unemployment rate is at an all-time high, the nation cannot afford the downfall of an industry that is indispensable to our economic development and which provides employment to thousands of South Africans.
“Government needs to level the playing field for our local cement producers so that they can focus their efforts on expansion rather than struggling to survive,” Evans concludes.