South Africa’s cement trade is doubtlessly dealing with an improved working atmosphere this yr and sooner or later.
This follows:
- The acceptance by the Worldwide Commerce Administration Fee (ITAC) in December 2020 of an utility from the trade for a sundown evaluation of the import tariffs imposed on cement from Pakistan 5 years in the past;
- The finalisation of an utility first submitted to ITAC in August 2019 by The Concrete Institute (TCI), on behalf of the trade, for “safeguard motion” towards low-cost cement imports, notably from international locations comparable to China and Vietnam; and
- Ongoing engagements between South Africa’s cement trade and the Division of Commerce and Business and Competitors (DTIC) in regards to the particular designation of South African-produced cement to be used in authorities infrastructure initiatives.
ITAC communications supervisor Thalukanyo Nangammbi confirmed the fee initiated a sundown evaluation of the anti-dumping duties on cement originating in or imported from Pakistan by way of Discover No. 718 in Authorities Gazette No. 43986 on December 11, 2020.
“By way of the fee’s anti-dumping rules, the prevailing anti-dumping duties will stay in place pending the finalisation of the sundown evaluation investigation. The investigation needs to be accomplished inside 18 months of the date of the initiation of the investigation,” he mentioned.
Nangammbi added the fee has not acquired every other utility for commerce treatment motion from the Southern African Customs Union (SACU) cement trade.
Nonetheless, The Concrete Institute MD Bryan Perrie mentioned this week mentioned this utility was submitted fairly a very long time in the past and ITAC has come again to the TCI with quite a lot of deficiency letters stating that it wants extra data.
“My understanding is that the ultimate data was submitted simply earlier than Christmas, however I don’t have any affirmation of that,” he mentioned.
In regard to the sundown evaluation utility associated to cement imported from Pakistan, Perrie mentioned that relying on the findings of the ITAC investigation, the import tariffs could also be elevated, decreased or taken away.
Development market intelligence agency Business Perception reported in December 2020 {that a} whole of 679 744 tons of cement with a customs worth of R482 million was imported into South Africa within the 9 months to September 2020, in contrast with the 1 025 616 tons valued at R502 million within the corresponding interval in 2019.
Cement imports in 2019 elevated year-on-year by 11%, following the 84% enhance reported in 2018.
Business Perception mentioned cement imports from Vietnam accounted for 69.8% or 474 474 tons of the full 679 744 tons of cement imported into South Africa within the first 9 months of 2020, with Pakistan accounting for 30% or 204 365 tons.
Designation extra essential
Perrie confirmed the TCI was working with the DTIC on the designation of cement for presidency infrastructure initiatives.
“Now we have had discussions with them and so they got here again to us and requested us for data, which we offered. It’s been backwards and forwards. It’s not simply the DTIC however Treasury as nicely [that is involved],” he mentioned.
Perrie confused the designation of South African-produced cement has change into extra essential due to the government-planned infrastructure funding plan.
The federal government in July 2020 unveiled 50 Strategic Infrastructure Initiatives (SIP) and 12 particular initiatives, involving a complete funding of R340 billion, as the primary tranche of a large infrastructure expenditure programme to drive the put up Covid-19 financial restoration effort.
Makes an attempt to acquire remark from the DTIC in regards to the standing of the cement designation engagements with the trade have been unsuccessful.
The best factor to do
Peregrine Capital govt chair David Fraser mentioned that if South Africa is to have a cement trade, it’s clear the trade wants some anti-dumping safety.
Fraser mentioned it has undoubtedly been testing for the trade to answer upswings in demand as a result of the present returns don’t warrant additional funding.
He added it’s troublesome to see any reinvestment, growth and upkeep of cement capability in South Africa whereas the funding returns should not there due to low costs, however this can move naturally when the trade could make an honest return on its funding.
Fraser additionally had a bone to select with the federal government about the best way carbon tax is utilized to the cement trade.
“There has not been any import responsibility associated to the carbon tax. How are you going to probably tax native producers however importers get in tax free with none carbon tax?
“That simply is not sensible, doesn’t obtain any goal and is one thing that additionally must be addressed,” he mentioned.
Fraser mentioned the attainable designation of South African-produced cement would clearly be optimistic for the trade and makes absolute sense.
“You need to try to maintain as many roles domestically and try to use as a lot native items in authorities procurement as attainable. It’s not distinctive. Everyone seems to be attempting to take care of themselves somewhat bit higher, notably throughout Covid-19 instances.
“On the finish of the day you need to be sure that the spend of the federal government is concentrating on to profit the South African economic system and South African folks to get the multiplier impact from wages, transport and all kinds of ancillary issues that the businesses procure themselves.
“By shopping for imported cement you’re clearly not and are clearly benefitting cement kilns all over the world and never domestically. So it simply is the best factor to do on so many ranges,” he mentioned.
