Lucky Cement Ltd. employees load sacks of cement at the company's plant in Karachi, Pakistan. Lucky Cement Ltd., Pakistan's biggest producer, plans to start its first overseas factory in Africa to take advantage of a construction boom. Photographer: Asim Hafeez/Bloomberg

Johannesburg - South Africa’s cement industry is facing a new imports challenge, this time from Chinese producers.

Donald Mackay, a director at XA International Trade Advisers, claimed yesterday that at least one factory in China had already been approved to export cement to South Africa and other Chinese producers were believed to have applied for approval.

“It won’t be long before a number of other Chinese factories are approved and we see Chinese cement simply replacing the Pakistani cement in South Africa,” he said.

All cement has to be certified as being compliant with the South African compulsory specification before it can be sold into the domestic market.

The SA Bureau of Standards failed to respond to a request for comment on how many Chinese cement producers had been approved and how many other applications had been lodged but not yet approved.

The competitive threat from the Chinese follows a number of local producers lodging a dumping complaint with the International Trade Administration Commission (Itac) about cement imported into the country from Pakistan.

Itac made a final determination in December on the anti-dumping duties and imposed duties ranging between 14.29 percent and 77.15 percent on cement imported from Pakistan. This resulted in cement imports into South Africa from Pakistan dropping by 30 percent year on year to September.

The Pakistan government had also approached the World Trade Organisation in a bid to have the anti-dumping rules imposed by Itac on cement exported from Pakistan revoked.

Mackay said about 38 000 tons of cement were exported from China to South Africa in both September and November. He said this was equivalent to two full shiploads of cement being exported to South Africa from China and indicative that exporters were looking to move their business away from Pakistan to China.

Stratalyze, an import and export data webpage managed by XA Trade Advisers, revealed that 645 910 tons of cement had been imported into South Africa from Pakistan between January last year and January this year, while 77 640 tons had been imported from China.

Mackay said the imposition of anti-dumping duties should drive business to the domestic cement industry, but this was not happening.

Siobhan McCarthy, the general manager communications at PPC, said the latest SA Revenue Service data indicated that more than 90 percent of the cement imported into South Africa had originated from Pakistan, with the balance imported from a number of countries, including China.

Lafarge South Africa said it was committed to the sustainable development of South Africa, which might be threatened by cheap imports.

The company said it believed that there was no need for cheap imports in light of South Africa’s favourable competitive laws.

But Mackay said the weakening in the value of the rand meant that Pakistan’s US dollar-based exports had become significantly more expensive, while the depreciation in the value of the Chinese yuan had suddenly made Chinese exports more competitive.

BUSINESS REPORT