The brick industry is in the throes of its worst slump in 15 years. The downturn started more than 18 months ago and has resulted in cut-throat competition with "excessive price cuts", production shutdowns and hundreds of retrenchments.
At Coetzee, the executive director of the Clay Brick Association of South Africa, said total brick production this year was about 19.5 percent lower than last year and sales had lost 8.5 percent.
Coetzee said 1 500 people in the brick industry had been retrenched during the year with the total number of people employed in the sector dropping from the previous high of about 21 000 in 2007 to about 14 000 this year.
He said many brick manufacturers had resorted to extended production shutdowns, with some not opening at all this year following a decline in demand from the residential property market.
However, Coetzee said most factories would probably resume production in the New Year because their stock levels would now be very low.
Brikor, the AltX-listed manufacturer and supplier of building and construction materials, is one of the companies knocked by the slump in the market. The firm reports that there has been "a virtual stagnation" in speculative investment in the past six months.
Werner Kruger, Brikor's chief operating officer, said its capacity utilisation dropped to about 40 percent this year from a peak of 85 percent in 2006/07 and the capacity utilisation of most brick manufacturers had been reduced by half.
Kruger said a strike lasting about two and a half months last year caused by rivalry between two competing unions led to 703 workers being retrenched. After arbitration, 363 were reappointed. He said 250 workers were retrenched this year because of the recession.
Kruger said the price war between brick manufacturers had been "excessive" with prices down to 2006 levels.
He said the brick industry had been in a slump for at least the past 18 months and a quick recovery in the market next year was unlikely because many manufacturers still had excess stock.
Kruger said Brikor had responded to the slump by implementing a freeze on all new appointments, stopping shifts at some plants and moving production to other lines where sales demand was higher.
The firm has also limited the use of sub-contractors, expanded its focus on the commercial building sector and construction segment, while also developing a new maxi block product line for use in the construction of factories and low-cost housing.
He said Brikor's face-brick factory in Vereeniging had been shut for three months, primarily for plant improvements related to better fuel efficiency and quality to enhance the plant's viability.
The plant would resume production next month. Its Nigel plant had also not been operating and was satisfying market demand out of stock.
Brikor last month reported a headline loss of 0.7c a share for the six months to August compared with headline earnings of 2c a share a year earlier. Group revenue dropped 18 percent to R155.5 million as prices and volumes declined.