South African cement industry worst affected due to corona virus lockdown restrictions

19-July-2020

CEMENT INDUSTRY NEWS | INDUSTRY GURU

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PPC head of inland business Bheki Mthembu, says the lack of large-scale construction projects in his country has left South African cement industry heavily dependent on residential construction. “Demand is less than the supply. Most of our cement goes to retailers and then local builders, but we still cater to larger companies when bulk deals are required. The lack of large-scale construction projects has left the industry heavily dependent on residential construction. Government needs to support us through infrastructure maintenance and other projects. We were already in survival mode; Covid-19 has almost been the final nail in the coffin,” said Mr. Bheki Mthembu.

South African cement industry at present are working at roughly 50% of the capacity utilisation level in June 2020 compared to that in June 2019 following the restart of production due to the relaxing of the corona virus lockdown to Level 3 from Level 4 on 1 June 2020. The construction sectors reduced by more than half since the 2010 FIFA World Cup when it supported 250,000 jobs. While the Level 5 government lockdown restrictions brought industry to a standstill in March, cement production restarted in May under Level 4.

Read: HeidelbergCement India - Lackluster Q1 performance due to covid lockdown restrictions 

However, construction was still prohibited and local stores had shortages of cement when they were allowed to open with restrictions being reduced to level 3 in June. The price of cement also has gone high sharply from ZAR80 (US$4.77) to ZAR120-150 (US$7.16-8.96) in June as cement producers have been facing tough situations in sourcing raw materials to produce cement.

 (Source: globalcement.com - edited)