With South Africa facing acute cement shortages due to a huge infrastructure development programme, black women-owned company Wiphold yesterday signed an agreement with Chinese manufacturer Tangshan Jidong Cement to import cement.
The agreement, which took eight months to conclude, would see Wiphold acting as Jidong’s sole distributor in SA, while opportunities in the rest of the African continent are expected to be explored by both parties.
Wiphold CE Louisa Mojela said yesterday that Jidong, which is 52% owned by the Chinese government, produced 25Mta of cement, which was more than that of SA’s producers combined.
Mojela could not confirm how much of Jidong’s cement would be imported to SA. We have no doubt that there is a huge demand for cement in the country because of current shortages, and currently only 10% of the housing market is met by local producers, not to mention the needs of the commercial sector. So we’re aiming to close that gap, Mojela said.
The domestic cement market grew more than 12% YoY even though increases in interest rates eased the pace of growth in the private residential sector.
In a study prepared for the Presidency by Sudeo International Business Consultants, the capacity of the four major local producers was about 14.8Mt last year. With huge construction under way, the local producers expect to increase the supply to 21.4Mta by 2011.
Rising cement shortages due to the infrastructure development boom saw Pretoria Portland Cement importing 200,000t last month, while Lafarge is importing 10% of its total cement volumes a year. Because of the shortage, the local economy has seen price hikes of up to 20% for bagged cement from Lafarge in the past five months, and Holcim’s 9,9% increase in January is expected to be followed by another increase next month. Asked whether Wiphold would distribute cement in SA at a lower price, Gloria Serobe, CE of Wipcapital, the financial division of Wiphold, said: We need to be competitive, and the price will be driven by how much it will cost us to import cement from China.