South Africa sees pick-up in 3Q cement sales

South African cement sales rose by 4.6 per cent to 3.39Mt in the third quarter of 2014 after contracting in the previous two quarters, industry data released by the country’s leading producer shows. However, full-year sales are expected to be lag those achieved in 2013 as a challenging operating environment prevails.

Figures posted by PPC show that volumes in the first nine months of the year, excluding imports and exports, were down 1.7 per cent YoY to 8.91Mt versus 9.06Mt in the comparative period of 2013.

Producers in the South African cement market have been under pressure from slow economic growth, subdued demand and rising competition.  Over capacity is set to continue to be an issue, and new players Sephaku Cement and Mamba Cement are set to bring further volumes on-stream.

Imports, which accounted for an estimated 12 per cent of national demand as at the end of June 2014, have also been impacting local producers, leading to declining utilisation levels. The International Trade Administration Commission (Itac) last year said it would probe alleged "dumping" of cement from Pakistan.

Against this backdrop, PPC said its South African operations are likely to face another “tough year” in 2015, a situation which its expects to continue in 2016 but with improvements.