Increased government spending for infrastructure, numerous projects planned by public corporations, low-cost housing projects, and revived residential construction are factors likely to spur cement demand in South Africa over the next few years, according to Frost & Sullivan’s Production and Investment Analysis of the South African Cement Industry.
The report finds that total cement demand in South Africa, which was 14.9Mt in 2008, could reach 23.1Mt in 2015. Market segments covered in the research include mining, civil construction, independent blenders, concrete product manufacturers, ready-mix producers, and building construction.
"The residential building construction sector is the largest user of cement in South Africa, accounting for approximately 50 per cent of consumption each year," says Frost & Sullivan Industry Analyst Litiya Matakala.
"The development of low-cost housing over the period 2010 to 2015 is expected to be the single largest demand driver for the cement industry in South Africa."
The government plans to deliver an estimated 630,000 housing units per annum between 2010 and 2015, assuring cement suppliers a high and steady demand for cement.
"The cost of energy is likely to remain a key challenge for cement producers over the period 2010 to 2015, due to the planned electricity tariff hikes by the state power producer Eskom, as well as the spiraling cost and demand for steam coal, while the global economy recovers from the downturn," Matakala says.