Cement prices increase during shortages

Cement prices increase during shortages
18 December 2006

The recent building boom in and around Durban has led to a shortage of cement in the city, with the problem worsening. 
The price of cement has increased in line with the shortage, with dealers having to pay R70 a bag, nearly 30% more than the price last month. 
The shortage has caused projects to be delayed, with many buildings left unfinished because of the city’s construction overload. 
The demand for cement has also been higher than in previous years. 
As cement requirements increase, demand is fast outstripping supply, with many building companies adversely affected. 
Vincent Reddy, Manager of Chatsworth Hardware Suppliers, said the shortage and the increase in demand had hit business in the area “very hard”. 
He said that without cement, his business could not manufacture blocks and other building materials. 
Materials like sand and gravel, which were mixed with cement to make concrete, were also not selling well. 
“Without more supplies, we will lose some of our regular customers,” said Reddy.
Nazneen Khan, of Natal Builders’ Suppliers in Rossburgh, blamed the shortage on Natal Portland Cement – the sole supplier of cement in Durban – which she accused |of not factoring in a sharp increase in demand. 
According to Khan, NPC worked on a quota system, supplying fixed amounts of cement to companies. 
“Many hardware stores have huge backlogs of orders and, when there are delays as well, it becomes even more of a problem.” 
According to other hardware stores, the lack of the core materials used to manufacture cement, the increase in customers and increased consumption were some of the explanations given by NPC for the shortage. 
Civil engineering contractors have also voiced dissatisfaction about the shortage, saying that some projects in the province had had to be put on hold. 
An engineer at Civil Engineering Contractors in Prospecton, who spoke on condition of anonymity, said they had had to stockpile cement and that the shortage had caused price hikes. 
“Stocking cement has meant extra costs for us because the normal retail price of cement has gone up from R50 to R70 (a bag),” the engineer said. 
“I have been forced to delay projects which were due this year to next year because we don’t know what is going |on with the cement manufacturers.” 
NPC spokesman Pieter Strauss confirmed that the company was experiencing problems with the delivery of core materials to manufacture cement, and had had to import cement to meet the strong demand. 
He said NPC was looking at expanding its plant in Durban to meet the demand. 
“We will be increasing our production by 60% and therefore will be able to supply cement next year,” he said.
Hardware suppliers said they were also having difficulty in keeping up with the demand for other building materials, including timber. 
This shortage has been attributed to the planned refurbishment of the city for the soccer 2010 World Cup. 
Prem Lachman, Manager of Machining Timber, said there was a “serious” shortage of timber, including local pine, which had affected prices. 
“There has been talk of importing pine, but this is unlikely to get off the ground,” he said. 
“Firstly, it is too costly compared to locally grown pine, and this won’t help matters,” said Lachman. 
Aradhna Singh, an employee at Wood City in Springfield, said the construction of residential complexes and flats in preparation for 2010 was causing the sudden leap in demand for timber and other building materials. 
Published under Cement News