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Cement industry seeks protection from cheap imports

Aug 13 2019 20:11
Sibongile Khumalo

The country’s major cement producers said on Tuesday they have applied to the International Trade Administration Commission (ITAC) seeking protection from imports threatening the industry.

The submission by The Concrete Institute (TCI) wants the body to place "safeguarding" measures from cheap cement imports from countries such as China and Vietnam, which they say are undercutting the industry by up to 45%.

The appeal comes as the industry is reeling from the current economic slump, which has hit the construction sector and seen major companies like Group Five and Basil Read apply for business rescue.

Speaking to journalists in Johannesburg, TCI Managing Director, Bryan Perrie, said the institute, which represents AfriSam, Dangote Cement SA, Larfarge, Natal Port Land Cement and PPC, believed the imports were seriously impacting the industry at a time when it is facing "unprecedented low levels of demand" due to a decline in economic growth.

"A safeguard action would therefore be required to ensure the viability of this critical industry," he said.

In an application made last week, the TCI stated that a total of 350 441 tones of cement imports reached SA shores in the second quarter of 2019, the highest number since the third quarter of 2015.

Imports from Vietnam topped 301 872 tons, and total imports have increased by 139% since 2016, it added.

The industry is further dealing with the financial impact of the newly implemented Carbon Tax, which the TCI says will increase operating costs and hit margins. 

According to Perrie, these factors do not apply to cement importers, leading to "uneven playing field" with local producers.

"The cement industry needs to compete on a level playing field and not be scrambling to survive under-priced imports."

It is not for the first time that the cement industry has reached out to ITAC for intervention. In 2015, the commission imposed anti dumping duties on cement import from Pakistan, which have been described as effective.

The industry is also considering a submission to the Department of Trade of Industry over the issue.

The cement industry is the latest sector of the economy which has been battered by cheap imports. The poultry sector has been fighting cheap imports of chicken products, with calls from the South African Poultry Association to curb imports from Brazil.

ppc  |  afrisam  |  dangote  |  lafarge
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