SA bans use of imported cement on all government-funded projects

The use of imported cement on government-funded projects has been prohibited by the SA National Treasury from November 4, which will provide a boost to local cement producers.

The announcement resulted in shares in JSE-listed cement and building materials producer PPC surging by 8.98% on Monday to close at R5.34 a share.

Shares in competitor Sephaku Holdings, whose building and construction materials asset portfolio comprises subsidiary Métier Mixed Concrete and associate Dangote Cement South Africa (SepCem), rose by 6% to close at R1.59 a share.

Bryan Perrie, CEO of Cement and Concrete SA (CCSA), the consolidated concrete and cement association, said on Monday the cement industry has lobbied for state protection against cheaper imported cement for several years and is delighted at the designation of cement.

Perry said National Treasury has issued a circular to all relevant state departments advising them of the new ruling in terms of the Preferential Procurement Regulations.

He said the designation prescribes that all organs of state, including state entities such as national, provincial, and local authorities and state-owned enterprises, must from November 4 this year stipulate in tender invitations that only South African produced cement, produced with locally-sourced raw materials, will be allowed for use on all public sector construction projects.

Perrie added that the designation of cement will assist in protecting the local cement industry from unfair competition.-moneyweb