Cheaper cement imports are jeopardising the viability of local plants, potentially leading to significant job losses.
A recent report by the Centre for African Management and Markets (CAMM) at the Gordon Institute of Business Science highlights that only two-thirds of the country's cement production capacity is currently operational due to a combination of import displacement and low demand.
The influx of cheap imported cement, which accounts for 25%-30% of the total market, poses a severe risk to the survival of the local industry, BDlive reports.
This displacement of domestic production by imports not only stifles local production but also undermines the competitiveness of South African cement companies.
The report emphasises that importers benefit from not having to contend with the same challenges faced by domestic producers, such as carbon taxes, labour issues, industry transformation goals, and environmental regulations.
According to findings by Chronus Research, approximately 2,241 jobs in the cement industry are at risk due to the impact of cheap imports, representing a significant portion of PPC South Africa's contribution to national employment in both formal and informal sectors, IOL has reported.
The potential closure of local plants as a result of cheaper imports could have devastating consequences on regional employment and economic stability. The report projects a substantial decrease in PPC's contribution to South Africa's economy, estimating an annual loss of R1.3 billion under certain scenario models.
The warnings from researchers and industry experts echo concerns about the vulnerability of South Africa's cement industry in the face of increasing competition from cheaper imports.
As stakeholders grapple with these challenges, strategic decision-making becomes crucial to navigate the evolving landscape and protect local jobs and economic contributions.
