The Daily Insider: China cement isn’t low quality (as claimed), nor is it being “dumped”

I’ve been belatedly converted to WhatsApp’s voice messaging function. Apart from quicker than texting, it’s also far more personal. Like earlier in the week, when my globe-trotting daughter caught “chatted” en route on her trip from Ireland via Dubai and then South Korea – messages received in the middle of the SA night.

Another of yesterday’s voice mails was from BizNews community member (and BNIC regular) Mike Wolhuter. The businessman from Pietermaritzburg shared the more complex story behind SA government’s banning of imported cement in its projects. You know, the announcement which gave the PPC share price a 20% boost.

Mike referenced the discussion Steven Nathan and I had on the subject where we fretted about the wisdom of Pretoria’s intervention in a sector, possibly the start of a slippery slope. The way Mike tells it, cut-price cement from China is not low quality (as claimed), nor is it being “dumped”. Rather, it’s cheap because of globalization.

Cement is bulky, so expensive to transport. Except when shippers have empty containers, so any income is better than nothing. For cement manufacturers it’s expensive to refire a kiln, so it makes economic sense to keep the plant running and offload excess production abroad. PPC and Co complain that this Chinese cement lands in SA cheaper than they can produce it. And without protection they’ll go out of business. Gordian knot, what?

  • PS: There’s a significant change in today’s Daily Insider newsletter. After experimenting in recent months, we’re returning to the (shorter) original format with my introductory note and less additional info. We will no longer be republishing your contributions in the newsletter; but please keep them coming. In future you’ll find them on BizNews.com under the title of Mailbox.

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