Displaying items by tag: South Africa
South Africa: Pretoria Portland Cement (PPC) has been granted environmental authorisation by the Western Cape Department of Environmental Affairs and Development Planning for the second phase of its Western Cape modernisation project. This includes replacing two ageing cement kilns at its Riebeeck plant with a new five stage preheater kiln. However, interested and affected parties could still appeal the decision.
PPC has completed the first phase of its modernisation strategy, a US$33m upgrade of a cement kiln at the De Hoek plant near Piketberg, resulting in improved environmental performance and thermal efficiency. PPC embarked on its modernisation strategy to ensure that it will have competitive, energy-efficient plants that comply with future changes to South African environmental legislation. It estimates that the complete modernisation strategy will be sufficient to meet Western Cape cement demand until 2022.
Lucky strike for imports to South Africa
15 August 2012Pakistan's Lucky Cement received the 'all clear' for its cement imports from the South African regulators last week. The situation exposes the increasingly competitive market in the country after the South African Competition Commission cartel investigations in 2011.
Sales of Lucky Cement were originally shut down in 2011 due to accusations made by its competitors, including Pretoria Portland Cement (PPP) and Natal Portland Cement (NPC). They complained that Lucky was not complying with South African standards. South Africa's National Regulator for Compulsory Specifications (NRCS) then ran its independent investigation and released its results last week.
The regulator's full 28-day test found no evidence that Lucky Cement imports were non-compliant with regards to their quality. A minor infringement concerning underweight bags was found and fixed. However, about a week beforehand, Lafarge South Africa's CEO said that his company was considering approaching another trade body with concerns about 'low-quality cheap cement' imported from Pakistan.
More serious criticism came from the Cement and Concrete Institute when the NRCS admitted that it didn't know how much cement had been imported into South Africa so far in 2012. The NRCS is supposed to inspect and approve the testing bodies each producer and importer uses for every 500t of cement.
Lucky Cement has been a regular importer of cement to South Africa since 2009. It exports around 1.65Mt/yr to over 22 countries in South East Asia, the Middle East and Africa. CCI figures reckon that 140,000t of cement was imported to South Africa in the first quarter of 2012, mostly by Lucky Cement. According to the Global Cement Directory 2012 South Africa's capacity is around 11Mt/yr.
Four domestic producers – Lafarge, PPC, AfriSam and NPC – were accused of cartel activity by the South African Competition Commission, in a case that has been running since 2008. PPC confirmed the existence of the cartel, whilst Lafarge and AfriSam were fined US$19.6m and US$16m respectively.
By letting Lucky Cement resume the sale of its cement in South Africa, the NRCS has arguably done more than the Competition Commission to prevent cartel activity. With reports surfacing that other producers in Pakistan and India are considering exports to South Africa, domestic producers are going to have to become more inventive and more competitive.
Lucky Cement cleared in South African quality spat
09 August 2012South Africa: The South African National Regulator for Compulsory Specifications (NRCS) has cleared imports from Pakistan producer Lucky Cement for use in South Africa.
Thomas Madzivhe, the NRCS's acting chief executive, said that complaints of non-compliance received about Lucky Cement imported from Pakistan had been fully investigated and the NRCS was satisfied the certification bodies had done all the necessary checks and tests and that the cement complied with South Africa's regulations. Madzivhe said that the NRCS suspected market access and competitive and market share issues might be a reason for the complaints.
Musa Ndlovu, the NRCS's acting executive for non-perishable products, said a directive had immediately been issued against Lucky Cement when complaints of non-compliance were received at the end of 2010, which meant this cement could not be sold in South Africa. Ndlovu added that the NRCS had carried out a full 28-day test on the cement but the results did not provide it with any tangible evidence to prove the product was non-compliant in terms of quality. The NRCS had only found evidence once of non-compliance but this was based on under-weight bags and not quality.
Commission hits back over Lafarge accusations
03 August 2012South Africa/Pakistan: Pakistan's Trade Commission in South Africa has defended products made by a Pakistani cement company, Lucky Cement, saying that they meet all quality standards in South Africa. The move follows accusations from senior figures within Lafarge's South African unit. The Commission also pointed out that the products were cheaper than established South African-manufactured products.
Lafarge had earlier said that it was considering approaching the International Trade Administration Commission of South Africa to protect the local market from what it deemed to be low-quality, cheap cement from Pakistan.
Lafarge wants Pakistan exports to South Africa blocked
01 August 2012South Africa: Lafarge is considering approaching the International Trade Administration Commission of South Africa to protect the local market from what it calls 'low-quality cheap cement' imported from Pakistan. The multinational is concerned that substandard products are being used for large infrastructure projects in the country, including the construction of hospitals, government housing and schools. Some importers are labelling cement as flour to dodge quality tests. Yet when the regulators do test imported product, they refuse to disclose the outcome, citing confidentiality.
"Imports are a concern for several reasons; sometimes the prices are very low, which affects us financially. We are looking at approaching the International Trade Administration Commission of SA to intervene in the market, but no decision has been made," said Lafarge South Africa CEO Thierry Legrand. He added that some cement sellers did not comply with the National Regulator for Compulsory Specifications, yet had import licences. Other domestic producers including AfriSam and Pretoria Portland Cement have also expressed concern at the situation.
In 2011 three companies importing from Lucky Cement, Pakistan's biggest cement exporter, were shut down. Cement and Concrete Institute (CCI) managing director Bryan Perrie said that 140,000t of cement were imported into South Africa in the first quarter of 2012 and that a substantial portion of it probably came from Lucky Cement. "People have struggled to keep accurate import statistics of cement but we know that Lucky is a major importer. People bring cement in as flour, so the statistics of how much comes in is often incorrect," he said.
Importers in South Africa are supposed to test samples for every 500t of imported cement. Yet when the CCI asked third-party regulators about the results of these checks, they were told this was confidential. The CCI had asked the regulator to publish a list of cement importers online, recording which products had letters of authority, but this has not happened.
South Africa: Pretoria Portland Cement (PPC) has seen its sales volumes drop by 3% year-on-year in the first half of 2012, which ended on 31 March 2012, mainly due to weak demand from Botswana and the Western Cape region of South Africa. However, the overall group revenue rose by 8% over the same period of 2011 from US$395m to US$427m, due to positive pricing of cement and lime products.
"Our results improved despite being tempered by weak demand in the Western Cape and Botswana and fierce competition on cement prices in all our regions," said PPC CEO Paul Stuiver.
PPC's earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 5% in the half-year, from US$126m to US$132m. Operating profit rose by 4%, from US$99.3m to US$104m. However, costs of sales were 11% higher than in 2011. The group said that it continued to be significantly affected by higher electricity and diesel prices, which both rose by 30% in 2011.
New CEO for Lafarge in South Africa
02 May 2012Thierry Legrand: Lafarge has appointed a new country CEO for its South African operations. Thierry Legrand was formerly the General Manager of Lafarge in South Africa but has changed role in line with the French building material giant's worldwide restructuring programme.
"Implementing this new structure will allow us to focus more efficiently on our customers and get closer to our markets," said Legrand. "We will use the strengths of our different product lines to design solutions in line with our customers' needs."
Legrand has managed several senior portfolios within the Lafarge group, both in South Africa and Europe.
New producer says directive 'makes no sense'
12 April 2012South Africa: An order by South African competition authorities to delay cement industry statistics by three months will negatively affect perceptions of economic activity in the country, according to industry newcomer Sephaku Cement.
The CEO of Sephaku Pieter Fourie said that the directive by the South African Competition Commission to the Cement and Concrete Institute that it delay the publication of its quarterly national cement sales figures by three months made 'no sense'. The institute represents the four major cement producers in South Africa: Pretoria Portland Cement, AfriSam, Lafarge and NPC-Cimpor.
Sephaku, a Nigerian-backed newcomer, is building an integrated cement production facility in the Limpopo province, where it intends to produce cement from the fourth quarter of 2013. It says that cement sales form a large component of construction activity in South Africa and are a leading economic indicator. Sephaku believe that the change in reporting will affect related economic predictions.
Stephan Olivier, CEO of AfriSam, commented that the change in industry reporting was a bid to make it difficult to use the data for anti-competitive behaviour. Simon Roberts, chief economist and manager of the commission's policy and research division, said that companies had previously used the data provided by the institute to 'monitor' their cartel agreement.
Projects by Nigerian-backed Sephaku and a new Chinese-backed empowerment entity, Conticem, will boost South Africa's capacity by nearly 5Mt/yr. Both Sephaku and AfriSam anticipate a better industry outlook in 2012 but uncertainty remains over the government's ability to accelerate its infrastructure plans.
Lafarge penalty confirmed
04 April 2012South Africa: The French multinational Lafarge will pay US$19.3m after it was found guilty of involvement in a cement cartel in South Africa. The Competition Tribunal confirmed that the settlement represented 6% of Lafarge's 2010 turnover in the Southern African Customs Union countries (South Africa, Botswana, Lesotho, Swaziland and Namibia). AfriSam, another of the cartel participants, previously agreed to pay an 'administrative penalty' of US$16.1m.
Lafarge fined over South African cartel
12 March 2012South Africa: Lafarge Industries SA has admitted taking part in a cement cartel and agreed to pay a US$19.6m penalty. The company reached the settlement with the South African Competition Commission after admitting to having taken part in price fixing and market division in the cement industry. As part of the deal Lafarge agreed to pay the penalty, 6% of its 2010 annual turnover in the Southern African Customs Union (SACU) region, which covers South Africa, Botswana, Lesotho, Swaziland and Namibia.
The case, which has been running since 2008, has investigated dealings at Lafarge, Pretoria Portland Cement (PPC), AfriSam and Natal Portland Cement-Cimpor (NPC-Cimpor). Following a 2009 raid at the offices of the accused parties, PPC applied for leniency and confirmed the existence of a cartel among the four cement producers. In December 2011, an agreement was reached with Afrisam, in which it confirmed the information provided by PPC and agreed to pay a US$16.5m penalty, representing 3% of its 2010 annual turnover in the SACU region.
The commission said that it will continue to investigate NPC-Cimpor.