CEMENT INDUSTRY SEEKS TARIFFS AMID CRIPPLING IMPORTS

The Concrete Institute (TCI) has lodged an appeal
with the International Trade Administration Commission of South Africa (Itac)
to impose import tariffs on cement imports to protect South African producers
from the mass importation of cheaper cement products from countries such as
China and Vietnam.

Out of the 350 441 t of cement imported into
South Africa during the second quarter of the year, 301 872 t came from
Vietnam. Overall, South Africa’s imports exceeded its exports by more than
50 000 t/y, and increased by 139% since 2016, statistics provided by the
TCI, on Tuesday, show.

These imports are largely channelled through
construction activities in the retail sector, AfriSam sales and marketing
executive Richard Tomes pointed
out during a briefing by the TCI’s members.

TCI MD Bryan
Perrie said imported cement was undercutting the industry by up to
45% and, when combined with low levels of demand, the South African cement
industry was “facing an existential crisis that threatens to undermine the
industrial capacity of the country”.

Additionally, the carbon tax, implemented in June,
has increased clinker costs by 2% in South Africa, thereby reducing margins in
the industry by a further 2%.

He explained that, owing to this difficult
environment being exacerbated by increasing cement imports, the industry was
“left with little option” but to apply for safeguard action to protect the
industry.

A successful submission to Itac would provide the
sector the space it needed to grow, Perrie said, adding that, currently, the
industry was “scrambling to survive” against underpriced imports.

The South African cement industry has the capacity
to provide up to 20-million tonnes of cement but is currently only producing
13-million tonnes.

Should Itac decide to initiate a formal
investigation, it will publish a notice to that effect in the Government
Gazette.

TCI’s application was submitted to Itac on August
5, Perrie told Engineering News Online.

Itac’s decision is likely to be announced only next
year, but potential challenges in collecting any additional data may present a
delay in the overall process before a decision can be made, he explained.

Over and above the safeguard application, PPC
Cement sales head Rob Rein said
the TCI had also approached the Department of Trade, Industry and Competition
for a designation on cement.

Should this application be successful, locally
produced cement would have to be procured for any government-led projects.

The TCI had submitted a formal letter regarding its
intention to apply for the designation, which the department had subsequently
acknowledged.

Discussions about what information would be
required before the application can continue are under way.

The TCI represents South African cement companies including AfriSam, Dangote Cement, Lafarge, Natal Portland Cement and PPC. https://www.engineeringnews.co.za/article/cement-industry-seeks-import-tariffs-amid-crippling-imports-2019-08-13