South Africa’s Demand for Cement Expected to Reach 23.1 Million Tons in 2015

Increased infrastructural spending by the government, numerous planned projects by public corporations, low-cost housing projects, and the revival of residential building construction are factors that are likely to spur the demand for cement in South Africa over the next few years.

New analysis from Frost & Sullivan, Production and Investment Analysis of the South African Cement Industry, finds that the total demand for cement in South Africa was 14.9 million tons in 2008 and estimates this to reach 23.1 million tons in 2015. The markets segments covered in this research service are mining, civil construction, independent blenders, concrete product manufacturers, ready-mix producers, and building construction.

"The residential building construction sector is the largest user of cement in South Africa, accounting for approximately 50.0 per cent of consumption each year," says Frost & Sullivan Industry Analyst Litiya Matakala. "The development of low-cost housing over the period 2010 to 2015 is expected to be the single largest demand driver for the cement industry in South Africa."

The government plans to deliver an estimated 630,000 housing units per annum between 2010 and 2015, assuring cement suppliers a high and steady demand for cement.

The rising energy costs are, however, a major challenge for South African cement manufacturers. Energy costs account for a significant portion of the total costs of producing and distributing cement. Hence, the operating margins of cement producers are coming under more pressure, with the costs of diesel, coal, and electricity increasing.

"The cost of energy is likely to remain a key challenge for cement producers over the period 2010 to 2015 due to the planned electricity tariff hikes by the state power producer Eskom, and the spiralling cost and demand for steam coal, as the global economy recovers from the downturn," explains Matakala.

Production and Investment Analysis of the South African Cement Industry is part of the Industrial Automation & Process Control Growth Partnership Services programme, which also includes research in the following markets: South African Low Voltage Circuit Breakers Market, Expenditure Analysis of the South African Gold Mining Industry, South African Field Instrumentation Market, and South African AC Drives Market All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.


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