Lafarge Cement has, together with other cement producers, raised an alarm over cement dumping from Pakistan into the country through South African Customs Union (Sacu).
Together with NPC, PPC and Afrisam companies, they allege that “bagged cement” from Pakistan is being dumped at a price 48% lower than the usual price, constituting of dumping.
Although the International Trade Administration Commission (Itac) was investigating the claims, it has found prima facie proof of dumping, which has also been shown via a report by Genesis Analytics.
The South African producers of cement have requested the commission to investigate the case of “bagged cement” since that is how cement is generally imported into the country. It would be “prohibitively expensive” to export bulky cement according to them.
The period to be included in the investigations to determine whether there was dumping is January to December 2013, but “material injury” will be determined in consideration of data from January 2010 to December last year.
Effects of cement dumping are far reaching
PPC MD Richard Tomes has claimed that cement dumping was leading to decline in profits, outputs, volumes and market share of cement in the region. It has also led to decrease in their ROI, cash flow.
Other effects included loss of employment to people according to Tomes. Sacu cement industry has, according to the news, reported a 15% increase in job losses between 2010 and 2013.
If true, the cement dumping claim may exacerbate the situation since 99% of all cement imported to South African Customs Union last year came from Pakistan.
According to XA International Trade Advisors, South Africa has recorded increased cement imports from Pakistan. The country increased tonnage from 362,350 tonnes imported in 2011 to 1.1-million tones imported last year from Pakistan. At the same time, the value of the imports shot to around US$59m last year, from around US$15.5m recorded in 2011.
According to Tomes, KwaZulu-Natal has been worst hit by these cement imports, but other coastal areas were also affected more than any other region, generally.
Meanwhile, in regard to cement dumping, Itac said through a Friday Government Gazette that official South African Revenue Service import statistics were applied in determining the price for the Pakistan cement imported in the country.
Although Portland cement is available in many types, the ordinary Portland cement is the most common of the imports and it is grey.
South Africa records a cement demand of around 18-million and 19-million tonnes a year. Last year’s domestic sales shot to 12.2-million tones in volume, 15% better than volume recorded for 2012.