CEMENT INDUSTRY SEEKS TARIFFS AMID CRIPPLING IMPORTS

The Concrete Institute (TCI) has lodged an appeal with the International Trade Administration Commission of South Africa (Itac) to impose import tariffs on cement imports to protect South African producers from the mass importation of cheaper cement products from countries such as China and Vietnam.

Out of the 350 441 t of cement imported into South Africa during the second quarter of the year, 301 872 t came from Vietnam. Overall, South Africa’s imports exceeded its exports by more than 50 000 t/y, and increased by 139% since 2016, statistics provided by the TCI, on Tuesday, show.

These imports are largely channelled through construction activities in the retail sector, AfriSam sales and marketing executive Richard Tomes pointed out during a briefing by the TCI’s members.

TCI MD Bryan Perrie said imported cement was undercutting the industry by up to 45% and, when combined with low levels of demand, the South African cement industry was “facing an existential crisis that threatens to undermine the industrial capacity of the country”.

Additionally, the carbon tax, implemented in June, has increased clinker costs by 2% in South Africa, thereby reducing margins in the industry by a further 2%.

He explained that, owing to this difficult environment being exacerbated by increasing cement imports, the industry was “left with little option” but to apply for safeguard action to protect the industry.

A successful submission to Itac would provide the sector the space it needed to grow, Perrie said, adding that, currently, the industry was “scrambling to survive” against underpriced imports.

The South African cement industry has the capacity to provide up to 20-million tonnes of cement but is currently only producing 13-million tonnes.

Should Itac decide to initiate a formal investigation, it will publish a notice to that effect in the Government Gazette.

TCI’s application was submitted to Itac on August 5, Perrie told Engineering News Online.

Itac’s decision is likely to be announced only next year, but potential challenges in collecting any additional data may present a delay in the overall process before a decision can be made, he explained.

Over and above the safeguard application, PPC Cement sales head Rob Rein said the TCI had also approached the Department of Trade, Industry and Competition for a designation on cement.

Should this application be successful, locally produced cement would have to be procured for any government-led projects.

The TCI had submitted a formal letter regarding its intention to apply for the designation, which the department had subsequently acknowledged.

Discussions about what information would be required before the application can continue are under way.

The TCI represents South African cement companies including AfriSam, Dangote Cement, Lafarge, Natal Portland Cement and PPC. https://www.engineeringnews.co.za/article/cement-industry-seeks-import-tariffs-amid-crippling-imports-2019-08-13