Government forbids imports for state projects, groundwork for domestic cement business is established.
Listen to this Article Now
On Monday, local cement companies gained a huge boost after the government declared a restriction on the use of cheaper cement imports on government projects.
The cement sector in South Africa, which comprises PPC, AfriSam, Sephaku Cement, and Lafarge Industries, has been fighting a flood of imports. Anti-dumping tariffs safeguard the sector from cement imports from Pakistan, but Vietnam has been an issue.
A circular by the National Treasury said that bids for state projects must, in respect of cement, “contain a specific bidding condition that only locally produced or locally manufactured cement with a stipulated minimum threshold for local production and content will be considered.”
Prior to the new laws, imports of cement and associated products made it difficult for local companies to compete, according to PPC.The new regulations, according to the company, will save the local industry, create jobs, and help the economy thrive.
Following the announcement, PPC’s stock increased by about 9%, while Sephaku Cement’s stock increased by 6%. Following years of pushing for protection, Bryan Perrie, CEO of industry organization Cement and Concrete SA (CCSA), said the sector was “delighted” with the designation.
Following years of pushing for protection, Bryan Perrie, CEO of industry organization Cement and Concrete SA (CCSA), said the sector was “delighted” with the designation. “This is an important ruling to protect a sector vitally important for the national economy.
Furthermore, it has come at the right time in view of the multi-billion- rand infrastructure projects planned by the government over the next three years,” he said. The government announced a budget for 50 major infrastructure projects and 12 special projects last year.
“Although cheaper, imported cements reaching South Africa may conform to regulatory standards, South African cement producers have to comply with a Mining Charter, transformation targets, and social and labour plans, all of which importers do not have to comply with. In addition, local producers are subject to Carbon Tax which the importers are also exempt from,” he said.
Story by : Norvisi Mawunyegah