CEMENT INDUSTRY CONTINUES BATTLE TO ‘LEVEL THE PLAYING FIELD’

Faced with an influx of cheap imports, the cement
industry is now taking its case to Parliament after it appealed to the
Department of Trade, Industry and Competition’s (DTIC’s) International Trade
Administration Commission of South Africa (Itac) for support in the form of
tariffs.

Industry spokesperson and The Concrete Institute
(TCI) MD Bryan Perrie will
make the case for the sector in meetings with Parliamentary Committee
chairpersons and members this week.

This, he pointed out in a statement on Tuesday, was
not an attempt to curtail competition, but simply a call for the playing field
to be levelled. “The cost of doing business in our country is significantly
higher than in other countries exporting cement to South Africa,” he explained.

According to the construction market intelligence
firm Industry Insight, cement imports into South Africa increased by 293%
year-on-year in July; a figure that, so far, seems to be increasing this year.

Perrie stated that “the industry is facing an
existential crisis which threatens to undermine the industrial capacity of the
country”. He called for urgent action, a result of which has seen TCI ask Itac
for a safeguard action against cheap cement imports, which are undercutting
local producers by almost 45%, and “skewing the market prices”.

In South Africa, cement manufacturing is subject to
regulatory requirements, including the newly introduced carbon tax and
ever-increasing energy costs, from which foreign producers are largely exempt.

Perrie added that the local cement sector paid
local taxes, which contributed to the government’s fiscus and national
development, something foreign firms do not.

The local cement sector has capacity to produce
than 20-million tons of cement a year but is currently producing around
13-million tons a year.

“We want to be part of the inclusive growth
championed by President Cyril
Ramaphosa at the World Economic Forum (WEF) on Africa in Cape Town,
when he stated, ‘this is Africa’s century, and we want to [use] it to good
effect’,” Perrie said.

The best way to use it, Perrie believes, is to
build and develop the local industry, and contribute directly to the
infrastructure growth that is essential for this to be “Africa’s century”.

“For example, the ratification of the Africa
Continental Free Trade Area (AfCFTA),” he said, “will be meaningless if we
can’t provide the infrastructure that will facilitate trade … AfCFTA requires
the survival of a local, regulated, and efficient local cement and concrete
industry.”

Perrie makes the case that South Africa’s greatest
challenge is unemployment, not only because it may lead to unrest, but also
because it stifles growth.

“Stimulating infrastructure growth and local
manufacturing capacity would embrace the challenges to improve labour
employment opportunities for the youth and adults,” he said, lamenting that
cheap cement imports will add to the jobs crisis, the knock-on effect of which
will lead to losses across the full value-chain in South Africa.

Currently, the construction industry accounts for
8% of total formal employment and 17% of total informal employment. The
cement sector directly employs more than 7 000 people and indirectly an
additional 35 000 jobs are affected. These could all be under threat, Perrie
claimed.

“We have already made our presentations to Itac,”
Perrie said.

“We want to make Parliament aware of the issues, and why we have applied for the tariffs. We are not looking for protection or a ban on imports – just to level the field.” http://www.engineeringnews.co.za/article/cement-industry-continues-battle-to-level-the-playing-field-2019-10-15