South Africa's cement market is facing fierce competition, especially from the impact of imported cement and the entry of international giants. At the same time, local cement producers such as PPC are also trying to improve their competitiveness to cope with market changes and challenges.
PPC is a South African producer of cement and building materials listed on the Johannesburg Stock Exchange. Matias Cardarelli, the company's chief executive, pointed out that the cost of producing cement in South Africa was very high, which allowed imported cement to occupy a share of the market for many years. Although PPC is building a new R3-billion cement plant to boost its competitiveness in the market, Cardarelli stressed that the government needs to focus on why it is so expensive to produce cement in South Africa and take steps to level the playing field for local producers.
Cadarelli believes that the government should play a role in public safety and fair market competition to solve the problem of cement outsourcing to grinding stations. He mentioned that the cement produced by independent grinding stations has a lower standard strength in some cases, which is not only a public safety risk, but also leads to unfair competition. Because the substandard cement is cheaper, it has an impact on local producers. In addition, he pointed out that the South African cement industry had not yet benefited from the government's plan to designate cement for infrastructure projects, because the government's infrastructure plan had not really been implemented. Local cement producers have not been able to fully benefit from the R1-trillion infrastructure investment planned by the government, which has not yet been implemented.
At present, overseas cement giants are entering the South African market, of which two Chinese companies have entered South Africa through the acquisition of assets, and a third company may join. These companies are bringing new technologies that could change the landscape of the South African cement market. Mamba Cement, for example, is jointly owned by Jidong Development Group and the China-Africa Development Fund, while Huaxin Cement acquired South Africa's Natal Portland Cement (NPC). PPC believes that these new entrants may pose a threat to local producers, but PPC is also actively responding.
PPC plans to replace two of its older plants in the Western Cape with a new one in the next two years, giving it two of the newest and most modern plants in South Africa, while its third plant is also quite modern. This initiative aims to improve efficiency, reduce costs and reduce environmental impact. Mr Cardarelli said both PPC and NPC had their own integrated plants, while PPC's research showed that low standard strength cement produced by independent grinding stations posed a risk to the market and public safety.
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