PPC won’t profit from imports, South Africa

PPC won’t profit from imports, South Africa
Published: 19 January 2007

Cement producer PPC says it is not going to profit from imported cement that the company has had to bring into South Africa to meet growing cement demand in the construction industry.

PPC CEO John Gomer-sall says that “logistics costs have increased, putting additional pressure on cement margins”.

He notes that the company’s imports might run into several million bags over this period and that the undertaking is a large one with long lead times and supply lines in foreign exchange and shipping risks.

Gomersall adds that the imported cement has been manufactured according to PPC Cement’s specifications and will carry the South African Bureau Standard (SABS) mark of quality, to which PPC will adhere. This answers concerns over the high price of cement that may lead to construction companies compromising the quality of their end product.

Owing to the unpredictable growth in cement demand in South African market, cement producer Holcim has also been importing cement to cope with peak seasonal demands currently being experienced in the building industry.

Holcim MD Karl Meissner-Roloff says, “Holcim South Africa’s decision to import cement is to ensure that we can supply our customers nationwide.” He adds that the company is committed to supplying all its customers across Southern Africa and that the importation is aimed at supplementing Holcim’s total capacity during the peak period. Holcim started importing cement in December last year, through East London and Walvis Bay, which are the closest points of entry to the company’s customer base. The cement is sometimes sold inland, depending on the market demand.

Holcim Corporate Communica- tions Wandile Zote says, “All our cement imports are SABS- approved.” Zote adds that because of the rand depreciation against the US dollar, imports are being brought into the country at a loss and are, therefore, affecting the profitability of local operations. He says it is the com-pany’s intention to continue importing cement for as long as demand outstrips the supply.

He attributes that unprecedented growth in cement demand to the boom in the housing sector over the last few years.