Cement imports into South Africa from Pakistan dropped by 30 percent year on year to September, following the imposition of provisional anti-dumping duties on cement imports originating from Pakistan.
Darryll Castle, the chief executive of listed cement and lime producer PPC, said the number of vessels landing in South Africa with imported cement had also declined.
“The cement industry continues to engage with the authorities to align dumping duties across Pakistani producers,” Castle said in PPC’s latest annual report released this week.
The International Trade Administration Commission (Itac) last week made a final determination on the anti-dumping duties on Portland cement originating or imported from Pakistan, imposing duties ranging between 14.29 percent and 77.15 percent.
This final determination seems likely to result in Pakistan cement producer Lucky Cement proceeding with a High Court application to set aside the imposition of the anti-dumping duties.
Castle added that new entrants into the South African cement market would continue to apply pressure on existing producers.
This was a reference to the entry to the South African market of Sephaku Cement and from next year Mamba Cement, which has depressed domestic cement prices.
It has also partly driven PPC’s expansion into Africa with a new plant commissioned in Rwanda in August and further plants scheduled to be commissioned in the Democratic Republic of Congo and Zimbabwe towards the end of next year.
There are also plans for a further plant in Ethiopia in the second quarter of 2017.
Castle said PPC was under no illusion about the challenging domestic market conditions that the company was expected to encounter in its 2016 financial year, which included a competitive landscape and difficult economic climate.
However, Castle said PPC was better equipped to manage these effectively.
“Our change management programme is expected to deliver additional financial and non financial benefits.
“We are also confident of delivering our remaining projects on time and within budget,” he said.
Bheki Sibiya, the chairman of PPC, said against the backdrop of a turbulent world economy, increasing cement capacity and falling cement selling prices across the African continent, PPC was focused on disciplined cost management, innovation and the efficient delivery of large projects.
“PPC is well placed to withstand the downturns of the economy and leverage the upswings. We are well positioned to respond to growth in demand when the South African economy expands,” Sibiya said.
“But South Africa is just one of the countries in which PPC is growing.
“Our strategy remains focused on becoming an African major – creating alternate income streams and reducing our risk by extending our footprint to the rest of the continent,” he said.
Castle added that PPC’s current broad-based black economic empowerment (BBBEE) level 2 rating had expired this month and its level 2 rating would translate to a level 7 rating next year when the revised BBBEE codes applied.
Business Report