NEWS: SA’s cement foundation should not be allowed to collapse

"Our country, not just the cement sector, is at a tipping point, and we must seize the opportunity provided by the government and private sector agreement that a national infrastructure build programme is vital for economic recovery. It is a national imperative that “spade-ready” projects must break ground without delay and make use of the best SA materials available" says Bryan Perrie MD of the Cement Institute.

Attractive is not a word that springs to mind when thinking about concrete. Dull, heavy, grey, boring and ugly are more likely descriptors. Yet concrete has been foundational to human society for centuries. Cement can be found in Babylonian, Assyrian, Egyptian and ancient Greek architecture. Even today, the magnificent dome of the Pantheon remains the most awe-inspiring concrete structure of ancient Rome.

SA’s modern economy has also been built using concrete. Our mines, railways, roads, dams, factories, offices, schools and houses are all constructed and maintained with concrete. SA-invented concrete dolos breakwaters protect numerous harbours, providing safe passage for trading nations and security for numerous coastal communities. Who cannot be proud of concrete’s contribution to our world-class structures such as Soccer City, the Moses Mabhida stadium, the Gautrain, Coega, Johannesburg University, Groote Schuur Hospital and OR Tambo International Airport? All of these concrete structures required cement to produce the concrete.

Yet the SA cement sector is dying and in urgent need of life support as a strategic national asset that cannot be allowed to collapse. There are multiple causes of its decline. The sector operates under high fixed costs, but demand tracks the economy closely and is directly correlated to the flailing construction sector. The high water mark of the construction industry in 2010 has been followed by a wasted decade of low investment in infrastructure, economic decline, weak domestic demand, plummeting private sector confidence, epic corruption and national insouciance.

A factor undermining the SA sector has been the devastating impact of the flood of foreign cement being dumped on the local market. Anti-dumping measures applied to Pakistani cement have simply opened channels for other Asian countries to ship in excess of 1-million tonnes annually into our local market. Another contributor to the perfect storm destroying the local cement sector is the Covid-19 lockdown.

Yet the industry is worth saving on a number of grounds. Local cement has a long and highly integrated value chain. Its quarries and cement production plants are often located in rural areas and provide the only source of employment and infrastructure for communities. Cement plants constitute a major capital investment and their operations contribute significantly to Eskom’s industrial revenues. Road and rail operators rely on local cement transport contracts, as do thousands of wholesale and retail sellers.

The SA cement sector is proudly broad-based BEE compliant and provides about 35,000 direct and indirect jobs, many of them highly skilled. While contributing significantly to the fiscus, including the payment of new carbon taxes, the sector has adopted leading-edge environmental and sustainability practices. But perhaps most importantly, our country and its people deserve quality — quality houses, quality schools, quality infrastructure. That is what SA cement delivers. It is a vital and progressive sector that cannot be allowed to die.

There may be a glimmer of light at the end of the decade-long dark tunnel. Encouragingly, both the ANC economic transformation committee’s “Reconstruction, Growth and Transformation” document, and Business for SA’s “A New Inclusive Economic Future for SA”, identify a programme of national infrastructure construction as essential to our country’s economic recovery. Ideological differences, dirigiste dispositions and distinctions of detail notwithstanding, there is sufficient policy alignment between these key constituencies to justify hope.

But if there is cause for real optimism in the SA cement sector it lies within the investment and infrastructure office of the presidency. Inspired by President Cyril Ramaphosa and led by Kgosientso Ramokgopa, the Sustainable Infrastructure Development Symposium identified 55 projects across six sectors, including water and sanitation, energy, transport, agriculture and human settlements. All these projects will require high-quality, certified, reliable and compliant cement to come to fruition and meet the broader goals of the National Development Plan.

Encouragingly, Ramaphosa, trade, industry & competition minister Ebrahim Patel and the ANC policy document have all called for the use of local materials in rebooting the economy and halting the country’s deindustrialising decline. This must extend to local cement.

To transition from policy documents to concrete projects will require urgency, determination and close co-operation, along with public-private partnerships built on trust, multi-stakeholder commitment and world-class project management.

This article was written for the Business Day by Bryan Perrie MD of the Cement Institute.