BUSINESS NEWS - The use of imported cement on government-funded projects has been prohibited by National Treasury from 4 November, 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.
Perry said National Treasury has stipulated a 100% threshold for both common and masonry cements.
“This is an important ruling to protect a sector vitally important for the national economy. Furthermore, it has come at the right time in view of the multi-billion rand infrastructure projects planned by the government over the next three years.”
