Displaying items by tag: Import
Pakistan cement export wars return to South Africa
27 August 2014South African authorities have started a new investigation into imports of cement from Pakistan. This time the inquiry will examine trade dumping allegations made by local producers including Afrisam, Lafarge, NPC Cimpor and PPC.
The application made by the cement producers provided evidence that the difference between the price of cement (the dumping margin) in Pakistan and for imports from Pakistan in 2013 was 48%. Or, in other words, the price of Pakistan cement imported to South Africa was nearly half that of what is was being sold for in the country that it was actually produced in.
The data submitted to the International Trade Administration Commission of South Africa comes from a report by Genesis Analytics on Pakistan cement prices in 2013 and tax information from the South African Revenue Service. Neither source is readily available for more detailed analysis here but data released by XA International Trade Advisors suggests that cement imports from Pakistan rose to 1.1Mt/yr in 2013 and at a value of US$59m. Roughly, this gives a price of US$55/t. This compares to an average price of US$90/t, from the All Pakistan Manufacturers' Association for the first nine months of the 2012 – 2013 Pakistani fiscal year, giving a dumping margin similar to the allegation by the South African cement producers.
Separate industry sources quoted by the Pakistan media on the story reported that the country supplies 1.5 - 1.6Mt/yr of cement to South Africa, its biggest export market, receiving a revenue of US$125m. Although this suggests a dumping margin lower than the one presented to the authorities it is still high.
Other information of note in the investigation notification is that the Pakistan cement imports are only competing heavily with the local bagged cement market in the Southern African Customs Union, which also includes neighbouring Botswana, Lesotho, Namibia and Swaziland. The notification discounts bulk cement imports from Pakistan as being 'prohibitively' expensive suggesting that the Pakistan cement producers have no import infrastructure in southern Africa or that something else is stopping them. For example, the country's market leader for production, Lucky Cement, has export facilities in Karachi with silos and automatic ship loaders. Yet it's only 'brick-and-mortar' presence overseas are projects building an integrated plant in the Democratic Republic of the Congo and a grinding plant in Iraq.
It may also be worth considering that South African industry newcomer Sephaku Cement hasn't joined the dumping allegation. The Dangote subsidiary was set to start producing clinker in late August 2014. This is out of character considering how prominent the Nigerian-based cement producer has been in campaigning against imports to its home nation. However, the Aganang plant in Lichtenburg, North West Province is over 700km from the coast and presumably safe from foreign imports at present.
One final question occurs. How are Pakistan cement producers able to dump bagged cement on the South African market at prices lower than what they are selling it for at home? If individual producers sold their excess at home at a lower price they could potentially undercut their competitors and make a profit. There are many barriers, from input costs to industry structural issues and other reasons that may be preventing this. However, if the South African cement producers succeed in their latest attempt to block imports from Pakistan it may add more impetus to remove such barriers.
Nigeria set to end cement imports in 2017
18 August 2014Nigeria: With a national production capacity at over 28Mt/yr, which far outstrips national demand of 20Mt/yr, Nigeria looks set to effectively end cement imports by 2017, according to UniCem's managing director, Olivier Lenoir. This is coming on the back of on-going strong national production capacity expansion by virtually all of the major cement producers operating in the country. By 2016, Dangote Cement will have increased its production to 50Mt/yr, Lafarge 15Mt/yr and UniCem to 5Mt/yr.
Brazil: The Foreign Trade Chamber (Camex) of the Brazilian Ministry of Development, Industry and Foreign Trade has approved anti-dumping measures against six countries: China, Saudi Arabia, Egypt, UAE, Mexico and the US. The Camex has also added a 4% levy to cement imports.
Dumping is the commercial practice whereby a country exports products at lower prices than those charged domestically in order to cause problems to its competitors. Whenever the practice is confirmed via a probe, imports of the products at hand from the dumping country can be overtaxed. The right to apply anti-dumping duties may be granted permanently or temporarily. Provisional authorisations occur whenever probes uncover signs of dumping. They are valid for up to six months and may be converted into permanent authorisations. The latter occur following more thorough probes and are generally valid for up to five years.
The Camex approved the inclusion of six products on the Exception List to the Mercosur Common External Tariff (Letec). When a product is added, its import tax rate can be raised or lowered in relation to the rate applied by the Latin American block's countries. The rate for cement, which was formerly exempt, will now have a 4% rate levied.
Indonesian Cement Association warns on imports
12 March 2014Indonesia: The Indonesian Cement Association (ASI) has warned that imported cement from Thailand and Vietnam is damaging the fortunes of local cement producers. ASI chairman Widodo Santoso predicted that demand for Indonesian-made cement in eastern Indonesia fell by 29.5% year-on-year to 93,000t in the first quarter of 2014. He blamed the 'drastic' fall of demand from Nusa Tenggara and Papua on imported cement.
National demand for cement in Indonesia grew by 1.6% year-on-year in February 2014 with cement sales at 4.47Mt. Cement demand in Java, the country's largest provincial consumer, rose by 3.4% year-on-year in February 2014.
In December 2013 the Indonesian Trade Ministry issued the Trade Minister Regulation No.40/2013 on the Import of Cement Clinker and Cement, which required cement importers to have a registered license prior to receiving imports approval. According to Widodo, imports would be prioritised for cement producers who build new cement plants. Other reasons for the country's lower increase in cement demand have been attributed to excessive rain, the eruption of Mount Kelud and preparations for elections.
The ASI estimates that cement sales in 2014 will reach 62Mt/yr, an increase of 5 - 6% over 2013. Exports are predicted to reach 1.5 - 2.0Mt/yr.
Increased clinker imports
16 December 2013Kenya: Increased clinker imports have been recorded at the Port of Mombasa, Kenya.
The surge in clinker imports is attributed to an unprecedented boom in the construction industry at the end of 2013 as a result of improved economic growth, rising disposable incomes and an expanding real estate industry.
Made in Russia
30 October 2013Eurocement recently trumpeted the production of two new types of cement at its Podgorensky plant in Voronezh Region. A focus on standards follows a self-declared offensive being taken by the leading Russian cement producer against foreign imports since August 2013.
When the 3Mt/yr Podgorensky plant reached its full production capacity in July 2013, Eurocement president Mikhail Skorokhod gave a press conference to promote his products over the imports from Iran and Turkey. Some of the more humorous comments Skorokhod made to the press included suggesting that Iranian cement might be radioactive and the revelation that the title of Eurocement's in-house magazine, 'All Shades of Grey', might be inspired by an erotic novel with a similar name ('50 Shades of Grey').
More seriously, Russia's southern regions between the Black Sea and the Caspian Sea are vulnerable to foreign imports. Both Turkey and Iran have high cement production capacities and they have access to the country via these two seas. In addition to rising housing construction in Russia since 2010, cement demand is expected to further take a boost from building associated with the Sochi 2014 Winter Olympics and the 2018 FIFA World Cup.
As stated by Skorokhod, the Podgorensky cement plant was created to fight foreign imports. Hence the focus on standards and government approval. The cement types in question - TSEM I 52.5N and TSEM II/ A-Sh 42.5N - were certified by NIIMosstroy (the Moscow Construction Research Institute) with additional testing conducted by the Voronezh Regional Center for Hygiene and Epidemiology. The move was similar to attempts made in recent years by local producers in southern and eastern Africa to focus consumers' minds on quality versus the potential risks of low-cost imports.
Eurocement clearly wants to fight imports head on given that, according to CMPRO data, total cement imports to Russia nearly doubled from 2.8Mt in 2011 to 5.1Mt in 2012. Turkey, Belarus and Iran were the main importers in 2012. In 2012 cement imports as a percentage of consumption hit their highest level since 2008. At the same time Russian consumption of cement rose by 13% to 65Mt in 2012 from 58Mt in 2012.
Back in August 2013, Skorokhod said that the Podgorensky plant had cut imports to the southern ports. With no figures available yet for imports in 2013 we can only wait and see.
Iraq bans imports of white cement from Iran
18 September 2013Iraq/Iran: Iraq has banned imports of Iranian white cement from the Iranian border towns of Shalamcheh and Chazabeh, according to Sadeq Sava'edi, the deputy head of Khuzestan's Cement Exporters Union. Iraq is still importing grey cement and other construction materials.
"Iran exports 8000t/day and 6000t/day respetively of construction materials from the Chazabeh and Shalamcheh borders areas to Iraq," said Savaedi to the ISNA news agency.
Previously Iraq banned imports of cement of Iran completely in June 2013 but trade resumed shortly afterwards. In January 2013 the Iran - Iraq Joint Chamber of Commerce Secretary General Jahanbakhsh Sanjabi said that the value of trade between the two countries was about US$10.7bn/yr. He added that Iraq is Iran's main trading partner for non-oil goods.
Israel allows cement into Gaza
18 September 2013Gaza/Israel: Israel has allowed a limited quantity of cement and other building materials into the Gaza Strip for the first time since 2007. Nazmi Muhanna, an official in the Palestinian Authority in charge of border checkpoints, said that efforts made by President Mahmoud Abbas to convince Israel to allow entry of construction material into Gaza for private sector usage had succeeded. Israel has promised to increase the quantity gradually.
"I welcome the decision which reflects our ongoing discussions with the Israelis," commented Quartet representative Tony Blair in a statement. "This is an important step in building a more positive environment for the diplomatic negotiations and in preparing the ground for the more comprehensive and transformative economic initiative, which we have been working on for the past few months."
Tanzania: Pascal Lesoinne, the chairman of the East African Cement Producers' Association (EACPA), has denied that a cartel exists in the Tanzanian cement market. His comments arose at a press conference in Dar es Salaam following action by the Tanzanian government to investigate cement imports from Pakistan.
"Repeated accusations of there being a cartel are nonsense as competition is fierce in the market and there are many players. Cement is a hot cake of which everybody wants to have a share," said Lesoinne in a presentation on the benefits of the cement industry to Tanzania's economy. Leading cement producers in Tanzania include HeidelbergCement, Afrisam and Lafarge. Lesoinne cited taxation and jobs as two principal benefits of Tanzania's local cement industry.
Confederation of Tanzania Industry (CTI) figures indicate that in 2012 over 200,000t of cement were imported from Pakistan to Tanzania. Industry players say it is difficult for local manufacturers to compete with imports, largely due to high costs of production in the country, with electricity costs in Tanzania being four times higher than in China and Egypt, according to EACPA figures. Lesoinne called for the government to create a 'level playing field' between locally produced and imported cement.
In late July 2013 the Tanzania government formed a seven person team to investigate alleged subsidies, tax evasion and the quality of cement imported from Pakistan.
Pakistan defends quality of its cement exported to South Africa
04 September 2013South Africa: Cement imports from Pakistan to South Africa will continue and are expected to increase, says Qamar Zaman, commercial secretary at the High Commission of Pakistan in South Africa.
In 2012, issues were raised about the quality of Pakistani cement but Zaman said that lower prices gave his country's imports a competitive edge. South Africa consumes about 12Mt/yr of cement, with imports sitting at 5%, according to Stanlib analyst Anashrin Pillay.
Multinational cement producer Lafarge complained publicly about Pakistani imports of cement into South Africa in mid-2012, mentioning poor quality and incorrectly packaged quantities. Zaman defended Pakistani cement, saying over the past decade it had been refined and the production processes were now 'of a high standard.'