Cementing a reputation

Cementing a reputation
CBN Audio:

CEMENT producer Métier’s shift into the Western Cape market could not have been better timed.

CBN reported in August that the group – controlled by Sephaku Holdings – was planning to compete in the keenly contested Western Cape market. Last month Sephaku confirmed Métier’s had opened its new cement plant in Bellville.

Not long after that announcement the Treasury Department issued a circular effectively banning imported cement in government-funded projects from 4th November.

In recent years importers of cement have increased market share due to the marginally higher pricing from local manufacturers from the additional, non-negotiable costs for legislative compliance such as carbon tax.

Treasury’s circular prescribes that all government institutions at all legislative levels and state-owned enterprises must stipulate in tender invitations that only South African produced cement will be permitted on all public sector construction projects.

In essence, the cement has to be produced with locally sourced raw materials – which are a condition that eliminates competitors that import clinker.

Sephaku reminded that government’s infrastructure fund had already submitted four projects – collectively valued at R21 billion – for national treasury approval, and was apparently finalising four more projects – worth some R85 million – for submission in 2022.

Whether any of these will benefit the new Bellville plant remains to be seen. In the meantime Sephaku said Métier’s Bellville plant had already started supplying customers, and believed sales were expected to grow in the coming months.

Importantly, Sephaku noted the expansion costs have been minimal because the subsidiary transferred under-utilised assets to penetrate the Western Cape market.

The group stressed: “Métier will be prudent in its approach to securing market share by leveraging its superior technical knowledge and service capabilities”.

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