The demand for cement in South Africa dropped from a peak of around 16-million tons a year to about 14-million tons a year between 2014 and 2015, says Southern Africa’s largest concrete materials producer, AfriSam.

AfriSam sales and marketing executive Richard Tomes adds that South Africa currently has an oversupply of cement, which has been exacerbated by new industry entrants, such as cement producers Sephaku Cement and Mamba Cement.

This oversupply, compounded by the country’s lack of infrastructure development and new construction projects, has resulted in a price deflation in cement, says Tomes, further noting that, with high energy costs, there are also increased cost pressures at production level.

“South Africa imports more than it exports and we won’t exactly be attracting large-scale industries with our energy constraints,” he adds.

He further notes that AfriSam does not expect cement demand to grow in the next year, as the construction and heavy construction industries in South Africa are also expected to remain flat.

Tomes attributes this to the industry not being able to recover to the levels experienced before the 2008 economic downturn.

He adds that there have been various issues around spending on infrastructure that are unlikely to be resolved soon as next year’s municipal elections will cause some disruption in the movement of people and unsettle approved expenditure.

Although R826-million has been set aside for infrastructure spend, it has taken a while for government to get the funding right and to get the private sector to participate. Tomes says the declining demand in commodities has also impacted on South Africa’s economy, as it relies on the mining sector and the export of commodities, such as coal and iron-ore, among others.

He adds, however, that, while this has aggravated the slowdown in the heavy construction sector, there are still numerous private-sector investment projects under way, such as the construction of the Discovery and Old Mutual buildings, in Sandton, which AfriSam is involved in.

Tomes further points out that private-sector investment projects have revealed a shortage of skills in the industry and a lack of in-house expertise in some disciplines, which have resulted in construction companies having to outsource not only workers but also technical skills to provide a complete solution to the client.

“We are, therefore, starting to partner more with innovative companies, such as Concrete Laser Flooring and Concrete 4 U to address some of these problems.

“Over and above the lack of skills in the country, there is the issue of the impact on the environment,” says Tomes.

With this in mind, AfriSam has focused its efforts on providing more sustainable solutions by offering readymix concrete solutions.

He explains that the use by contractors of readymix concrete brings with it numerous advantages as it removes the issue of operating an on-site batching plant with the associated aggregates and cement stock requirements. It minimises the number of deliveries, thereby reducing traffic to and from the site – a major advantage on already congested roads. This, with the reduced dust and water consumption on site, is beneficial to the environment as well.

“Designs are changing and people are demanding materials that allow them to achieve their objectives in terms of green building,” he reasons.

A challenge for all companies operating in the construction materials space, Tomes notes, is trying to find a way to offer construction companies solutions that are more convenient, taking into account the skills shortage, the demand for high-quality and environment-friendly materials and, naturally, the rapid pace of construction.

Projects in Progress
He adds that the company has seen increased demand for cement in coastal markets, which is why AfriSam decided to establish a readymix plant in Saldanha Bay’s industrial development zone (IDZ), in the Western Cape. Also on the cards is the construction of a cement plant in Saldanha Bay, extending the company’s operational cement footprint to the Western Cape.

Tomes further notes that AfriSam is planning to build a mill in the Coega IDZ, located in the Eastern Cape, as the company has been transporting its cement to customers in the province from Kimberley, in the Northern Cape.

Tomes says a mill in the Coega IDZ will meet the Eastern Cape market’s demand for cement, reduce the distribution costs and provide customers with a more cost-effective product.

Meanwhile, further afield, AfriSam will have finalised the construction of a new kiln at its Tanzania-based cement plant by the end of this year. “The new kiln will add an additional 600 000 t of clinker production capacity to the plant,” states Tomes.