KZN’s concrete industry ready for growth challenges

KZN’s concrete industry ready for growth challenges
Published: 07 December 2006

Despite some of the challenges, there are huge opportunities to be had in the construction industry, with massive public infrastructure and private sector investment not seen in South Africa since the 1970s. 
 
The cement industry is already feeling the effect of the boom and is increasingly coming under capacity pressures. 
 
But Alex Hall, KwaZulu-Natal General Manager of industry giant Holcim, believes the industry will deliver: “Our industry is also seeing multi-billion rands of investment being pumped in to meet demand. There are cement shortages but, in KZN, it is not as acute as in other major hubs in the country.” 
 
Hall, who has been at the helm of Holcim KZN for four years now, says Holcim chiefly has aggregate and ready-mix operations in the province, but is part of one of the world’s largest cement companies. 
 
“Swiss-based Holcim operates in many countries worldwide and boasts a turnover of more than R90 billion annually,”said Hall. 
 
“Formally the Alpha cement brand in South Africa, Holcim is 45.5% owned by the Aveng construction and engineering group, which is listed on the JSE.” 
 
 
On the business of cement in KZN, Hall said: “Demand should be filled by the main cement producer, Natal Portland Cement, which is undergoing a multi-billion rand expansion and on which players like Holcim depend on in KZN.” 
 
He said Holcim had seen phenomenal growth in the ready-mix business in KZN since 2002 and the company was working to keep up with market demand. 
 
“With exciting projects coming on line in the province, such as harbour expansions, the new soccer stadium and the King Shaka International Airport, we need to be looking at ongoing expansion because we’re in a high-growth position. We have already invested well over R100 million in trucks, equipment and mobile plants.” 
 
The question, Hall said, was: “Are we doing enough for what’s coming? Because there are many private sector projects in line, some still on the drawing board and some we are not even aware of yet.
 
“The real challenge is forecasting growth in the residential sector, for example, growth being facilitated by Moreland. Residential demand added to the infrastructure boom could see the cement industry battling to keep up.” 
 
According to Hall, the reality is that KZN has experienced a slower pace of growth in the construction industry in the past year compared to Gauteng and the Western Cape. 
 
“The good thing for KZN is that there are big projects ahead and, importantly, this is seen as more sustainable growth because it is linked to trade, which will result in additional spin-offs.” 
 
Hall said the much-publicised skills shortage in the country was one of the major issues also affecting the building material industry. 
 
“In some cases, jobs have been vacant for more than 200 days because we need quality human resources who are highly experienced and technically skilled in areas including concrete technology and engineering.” 
 
One of the other untold challenges facing the industry, according to Hall, was that of illegal mining. “These unscrupulous operators, who do not have mining rights and rape the earth, do a roaring trade outside regulation,” he said. “The obvious result is a negative impact on the environment and loss in taxes by government.”