The construction boom in South Africa is to receive a prop from an unlikely quarter: Zimbabwe. The demand for cement continues to outstrip supply in South Africa because of private developers and public works programmes — including construction of new stadiums for the 2010 World Cup.
Regional demand for cement grew by 8,3% in the first quarter of the financial year,w compared with the corresponding period last year.
“At present, however, customer requirements can be met from our own local production supplemented by supplies from our Zimbabwe operation,” said Tony Phillips, the outgoing chairperson of Pretoria Portland Cement (PPC). “It is unlikely that further imports will be required until mid-year.”
At the beginning of this year PPC said it would import between 300 000 and 500 000 tons of bagged cement to plug shortages of the commodity. PPC’s chief executive, John Gomersall, could not say how many tons his company would import from Zimbabwe because of economic uncertainty in that country and the logistics of bringing the commodity to South Africa. “We never know when there is transport,” he said.
In the company’s annual report, however, Phillips noted: “Our Zimbabwe operation has proved to be a useful resource in African production.” He said the parent company was committed to Zimbabwe operations. Zimbabwe-based analysts said the local cement industry has not been spared the privations suffered by the rest of the economy. One analyst said “hyper-inflation, shortage of railway carriages and foreign currency shortages” had adversely affected the industry because demand is very low in Zimbabwe’s struggling economy.
Phillips said: “[The] Batsweledi expansion project [to increase cement manufacture] currently underway at Dwaalboom is fully contracted, within budget and progressing according to schedule.” The project will be commissioned in the second quarter of 2008.
“Until such time as the new capacity comes on stream for our Batswaledi project and future Western Cape expansion project, the company has implemented plans to import South Africcan Bureau of Standards-approved cement, manufactured to our Surebuild specifications,” Gomersall said in the report.