090508 Cement companies in South Africa are to increase their prices on cement.picture Simphiwe Mbokazi 8

Johannesburg - A looming competitive threat to South African-based cement producers from exports from China has been confirmed.

Thato Chabeli, the interim group manager marketing, public relations and communications at the SA Bureau of Standards (SABS), confirmed yesterday “two schemes” for Longkou Fanlin Cement had been approved by the SABS.

Read: Chinese imports threaten cement sector

Chabeli said the SABS had not received any other applications from cement factories in China for certification that were still pending.

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

However, Chabeli stressed Longkou Fanlin Cement also needed to secure a letter of approval (LoA) from the National Regulator for Compulsory Specifications (NRCS) before the company would be permitted to export its cement to South Africa.

The NRCS failed to respond to a request for comment on whether it had issued LoA to any cement firms in China.

The mandate of the NRCS includes promoting public health and safety, environmental protection and ensuring fair trade through the development and administration of technical regulations and compulsory specifications plus market surveillance to ensure compliance with the requirements of the compulsory specifications and technical regulations.

Donald MacKay, a director of XA International Trade Advisors, said that the certification by the SABS of cement factories in China meant the domestic cement industry was likely to soon be in the same position as it was before when cement from Pakistan was exported to South Africa.

MacKay added that cement factories had to be certified to ensure their cement complied with the compulsory national standard and to prevent someone using inferior quality cement that resulted in their house “falling on their head”.

The competitive threat from Chinese cement producers follows a number of local cement producers lodging a dumping complaint with the International Trade Administration Commission (Itac) about cement imported into South Africa 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 and the Pakistan government to approach the World Trade Organisation (WTO) to revoke the anti-dumping rules imposed by Itac on cement exported from Pakistan.

MacKay told Business Report earlier this week that about 380 000 tons of cement were exported from China to South Africa in September and November last year.

He said this was equivalent to two full shiploads of cement being exported to South Africa from China and was indicative that exporters were looking to move their business away from Pakistan to China.

About 645 910 tons of cement was imported into South Africa from Pakistan between January last year and January this year while 77 640 tons was imported from China.

MacKay believed it would not be long before China replaced the Pakistani cement that was being imported.

BUSINESS REPORT