- Investments will amount to $940 million between 2013 and 2018 across South Africa, Zambia and Zimbabwe
CAPE TOWN, South Africa, Sept. 18, 2013 /PRNewswire/ -- Rapid infrastructure development in South Africa and its neighbouring countries will brighten the prospects of the cement industry in the Southern African region. In fact, cement production is instrumental in government expenditure plans, especially the Regional Infrastructure Development Master Plan (RIDMP) which will be rolled out by the Southern African Development Community (SADC) over the next 15 years.
New analysis from Frost & Sullivan (http://www.industrialautomation.frost.com), Southern African Cement Industry Production and Investment Forecasts, analyses whether self-sufficiency is an achievable task for Southern Africa's cement producers, and also whether capital investments will realise a positive return-on-investment (ROI) for the region's existing and future cement suppliers. The study, which focuses on South Africa, Zambia, and Zimbabwe, also finds that investments in the cement industry will amount to $940 million between 2013 and 2018 across the three countries.
"Higher government spending on public infrastructure, such as the construction of new energy and power facilities, as well as the expansion of transportation infrastructure, will boost the need for cement in Southern Africa," said Frost & Sullivan Industrial Automation and Process Control Research Analyst Yeukayi Kadzere.
Cement production stood at 14.9 million tonnes in 2012 and is expected to reach 18.1 million tonnes in 2018 – owing to the addition of new cement manufacturing plants in South Africa, Zambia and Zimbabwe. By 2018, these projects will increase cement production capacity by another 5.1 million tonnes.
While on the one hand production is rising, the costs associated with production are also escalating as a result of soaring electricity and fuel prices. Cement producers in the Southern African region, therefore, are struggling to keep costs to a minimum in order to maximise profit. Pricing pressures are further intensified by each participant's attempt to remain competitive by keeping cement prices down.
"Manufacturers can potentially charge higher prices to improve profitability by exporting cement products to neighbouring countries that have an enormous demand but little supply," prescribed Kadzere. "Targeting markets as close to their depots as possible will minimise distribution costs and increase the profits of cement producers in the region."
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Southern African Cement Industry Production and Investment Forecasts
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SOURCE Frost & Sullivan