SA Affordable Housing May - June 2020 // ISSUE: 82 | Page 13

ASSOCIATIONS
and 77%. The problem with dumping is it is country-specific
and all that happened is when we got those tariffs imposed,
Pakistani imports dropped, and we started getting imports
from China and Vietnam.”
Perrie says government and the dti are engaging the
industry about cement imports but had not at the time of the
interview yet reached a solution. Africa.
AFFORDABLE HOUSING THE ONE BRIGHT LIGHT
IN CONSTRUCTION
Construction market intelligence firm Industry Insight’s
economist David Metelerkamp had recently given a
presentation, and Petrie relates his view that the building
industry is also ‘not doing great’, though the lower end of
the housing industry is still healthy.
These importers are primarily small companies, mostly
in coastal areas as the costs of transporting cement make
it prohibitive anywhere else. It is therefore affecting those
companies that have plant in the coastal areas of KwaZulu-
Natal and Western Cape. This has a knock-on effect, says
Perrie, because those plant then try move their production
inland making other areas more competitive, with the
result that cement prices throughout the country are at
rock bottom.
The result is that cement producers like PPC and Sephaku
in late 2019 announced poor financial results. In November
last year PPC Southern Africa’s cement reported volumes
declined by between 15% and 20%, though the decline was
less significant in the coastal regions. Sephaku’s revenue
was down for the half year by a similar percentage. Perrie
says all the cement companies have been retrenching people
– job losses the country can ill afford.
“The socio-economic problem is that most cement
plants are located near the raw material in primarily rural
areas. If a plant closes, it has a catastrophic localised
impact on the community. There is nothing else there in
terms of employment.
“We’re not trying to stop imports – we’re simply saying we
need to compete on a fair basis with level playing fields. One
example is in June last year South Africa imposed a carbon
tax. Imports don’t have to bear that cost: that’s an immediate
2% disadvantage to South African manufacturers. These
exporting countries don’t have our Mining Charter, our BEE
regulations – which the industry all supports, but it’s a cost.
They don’t have our environmental requirements, and more.
The data we currently have suggests they can undercut us by
about 45%.”
Just as importantly, the cement industry is also talking
to dti about designation (which the steel industry also had
before the Saldanha plant closed). This means that any
government project has to use local product “though we
have learned from the steel example that the big challenge
is enforcement”.
CATCH 22
Cement has to meet stringent SANS specifications, which
the National Regulator for Compulsory Standards (NRCS)
are supposed to enforce. Perrie points out that in the case
of imports every 500 tonnes should be sampled to have it
tested “and we’re not sure that’s happening”. If this were
EAMONN RYAN
QUARRY ONLINE.
Bryan Perrie, Managing Director of The Concrete Institute (TCI).
PPC Cement is one of South Africa’s largest manufacturers of
cement and says volumes have declined.
the case, the SABS regulator should have undertaken 2 000
samples and testing last year based on one million tonnes
of imports at one test every 500t, but it refuses to confirm
whether or not it has, says Perrie, citing confidentiality.
“Local plants have automatic controls which can be
checked any time, and the same ought to be happening at
the plant where the imported cement is manufactured, in
addition to the random sampling at the port of entry.
“When those test results come back in 28 days and it
has failed, you have absolutely no idea where the failed
batch is, or what structure it has gone into – and that is the
real concern. Both SABS and NRCS report to dti, hence our
discussions with the latter.”
The final issue, he says, is the lack of understanding
at the bottom end of the construction industry where to
an ordinary builder “cement is cement”. The game of catand-mouse
over imports can clearly carry on ad infinitum
if there is a ready market for them among builders who
don’t understand the need to build affordable homes using
compliant concrete. “They just go into a hardware store and
buy the cheapest cement, which is often not appropriate to
the purpose. It is for this reason that TCI does its training. It’s
a Catch 22 to get them trained before they build unsound
structures,” says Perrie.
“What we are busy doing is trying to get the authorities to
do what the regulations require of them.”
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