Cement exports dive as building boom eats up supply

Cement exports dive as building boom eats up supply
25 April 2007

South Africa’s cement exports plunged 34 per cent last year as the country’s construction and building boom accelerated.  
Cement exports now represent only one per cent of demand and only 156,256t of cement were exported from South Africa last year, according to the latest Cement and Concrete Review published by the Cement and Concrete Institute. 
Apart from two peaks in 1999 and 2002, exports have been on a downward path for the past 10 years.  
In 1999 cement exports totalled close to 700,000t.  
The review attributed the weakening in exports predominantly to rising local demand, which limited the amount of cement available for export markets, although the strength of the rand had also played a role over the past year.  
Cement was typically shipped to other African countries and India Ocean islands.  
The review said regional demand grew by 9.9 percent to 14.2Mt last year. It was forecast to grow at least at the same rate as gross domestic product, if not faster, until 2010.  
In 2005 cement sales in southern Africa rose 11 per cent to a record 12.98Mt. They were forecast to rise a further eight per cent last year.  
The review warned that the extent of cement demand growth “will very much depend upon the availability of building materials and the skills required to implement construction projects”.  
It said cement demand from Lesotho, Botswana, Namibia and Swaziland last year was about 3 percent lower than in 2005, but it was very likely that these countries, particularly Botswana, bought cement from countries other than South Africa.  
All four cement manufacturers – Holcim South Africa, Lafarge South Africa, Natal Portland Cement (NPC) and  Pretoria Portland Cement (PPC) – had begun importing clinker or cement to meet demand. Clinker is an important raw material in cement.  
“This reached the equivalent of about 1 million tons of cement product during 2006.”  
PPC, Barloworld’s cement and lime subsidiary, is expanding its capacity by 1 million tons a year at a cost of R1.68 billion. Lafarge South Africa, the local subsidiary of the French building materials group, is investing R1.2 billion project to increase its cement capacity by 1Mta. NPC, owned by Cimpor Cimentos de Portugal, is expanding its Simuma plant in KwaZulu-Natal at a cost of R800 million.  
Most of these projects are scheduled to come on stream next year.  
The review added that there had been many reports of co-operative buying groups and independent brokers planning to import from as far afield as China. But, it said, “very little product appears to have reached the marketplace”.  
Published under Cement News