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New Business Trends  Eastern Trade
Wiphold cements deal with China
WITH SA facing acute cement shortages due to a huge infrastructure development programme, black women-owned company Wiphold yesterday signed an agreement with Chinese manufacturer Tangshan Jidong Cement to import cement .
The agreement, which took eight months to conclude, would see Wiphold acting as Jidong’s sole distributor in SA , while opportunities in the rest of the African continent are expected to be explored by both parties.
Wiphold CE Louisa Mojela said yesterday that Jidong, which is 52% owned by the Chinese government, produced 25-million tons a year of cement, which was more than that of SA’s producers combined.
Mojela could not confirm how much of Jidong’s cement would be imported to SA . “We have no doubt that there is a huge demand for cement in the country because of current shortages, and currently only 10% of the housing market is met by local producers, not to mention the needs of the commercial sector. So we’re aiming to close that gap,” Mojela said.
The domestic cement market grew more than 12% year on year even though increases in interest rates eased the pace of growth in the private residential sector.
In a study prepared for the Presidency by Sudeo International Business Consultants, the capacity of the four major local producers was about 14,8-million tons last year. With huge construction under way, the local producers expect to increase the supply to 21,4-million tons a year by 2011.
Rising cement shortages due to the infrastructure development boom saw Pretoria Portland Cement importing 200000 tons last month, while Lafarge is importing 10% of its total cement volumes a year. Because of the shortage , the local economy has seen price hikes of up to 20% for bagged cement from Lafarge in the past five months, and Holcim’s 9,9% increase in January is expected to be followed by another increase next month.
Asked whether Wiphold would distribut e cement in SA at a lower price, Gloria Serobe, CE of Wipcapital, the financial division of Wiphold, said: “We need to be competitive, and the price will be driven by how much it will cost us to import cement from China.
“Quality is going to be important. That is why Jidong had to get (South African Bureau of Standards) certificates to make sure that cement that comes here is of high quality,” said Serobe.
Jidong chairman Yu Jiuzhou said the company delivered 70-million tons of cement towards the economic development of China, and had reached sufficient scale to export. “ We look forward to Wiphold expanding our market, and believe there is much opportunity in SA and on the African continent.”
Source : Business Day
new business trends  eastern trade |
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Jaqueline Martinez
Jaqueline studied Public Relations and Journalism at CPUT between 2001 and 2003. She completed Information Systems and Communication Science 101 at Unisa. She teethed on business journalism as a communication specialist with Old Mutual for several years. Jaqueline travelled to Asia and the US teaching English before returning to South Africa and finding her niche as an online editor and features writer with BizAssist Technologies and SA Guide to Business Opportunities.
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