Cement industry recovery in 2H11

Cement industry recovery in 2H11
Published: 19 August 2010

Thierry Legrand, CEO of cement group Lafarge South Africa said on Tuesday that he expected the cement industry to recover in the second half of 2011.

Speaking at the launch of a new soil stabilising product, RoadCem at the group’s plant in Randfontein, Legrand pointed to a current slump in the local cement industry.

"Market development is not what we had expected," he said highlighting a two per cent decline in 2008, following an industry wide cement production of about 13Mt in 2007.

That was followed by a 10 per cent decline in 2009, while a decline of up to eight per cent is anticipated in 2010, according to Legrand.

"In 2010, the market has declined 5 per cent, and maybe we will see 7 per cent or 8 per cent. We are not running at full capacity," he said.

He added that on the residential side, an expected recovery in 2010 had not transpired, however he said that expectations were high for 2011.

Lafarge recently invested ZAR1.2bn to increase its cement capacity, particularly at its Randfontein site, with its main operations located in Lichtenburg.

The new factory in Randfontein came on stream at the end of 2009, and employs 38 full time staff.

It has the capability of producing 1Mta, or 4800tpd at full capacity.

When I-Net Bridge asked Legrand what fuelled his optimism for a recovery in 2011, he said social housing was a potential focus for government, following the conclusion of the football World Cup.

"Government has been focussed on the World Cup, and rightly so.

"South Africa demonstrated that it can be successful, but now it is time to put focus somewhere else, and be successful there," he said.

The chief executive also highlighted lower interests rates and willingness for banks to slowly start lending again, as further points for optimism.

"We are seeing people beginning to renovate their homes more, and this is a side of our business that is doing well," he said.

With 78 000 employees in 78 countries, Lafarge posted sales of €15.8bn in 2009.