49 / 68
October 2015
W
hile this is analarming statis-
tic according to construction
specialist Don Schoeman
of Crowbar Solutions, it represents
an opportunity for the industry to
win market share from competing
segments and should form the basis
of a new strategy for the readymix
industry to pursue.
Addressing delegates at the South
African Readymix Association confer-
ence, Schoeman says that themajor-
ity of cement supplied in South Africa
is bagged cement sold through retails
outlets. Of all bags sold, the vast
majority is sold through a handful of
retailers who employ slick marketing
techniques tokeepcustomers coming
back for more.
In addition, the enormous buying
power of these retailers continues
to force cement producers to slash
prices of bagged cement which en-
ables them to maintain low prices
compared with smaller users (such
as the readymix industry).
He suggests SARMA should rep-
resent the industry to establish a
united buying group and negotiate
better pricing for its members. With
competitive pricing, he suspects that
the market share of readymix will
increase exponentially in time.
Some of the standards governing
the use of concrete are outdated
and need to be changed. This is ac-
cording to concrete expert George
Evans of PPC, who is actively working
with standards authorities and the
industry to modernise the country’s
concrete standards. Many of the stan-
dards are currently being revised to
meet the needs of the end users and
ensure quality, price and longevity of
structures. The standards currently
being improved apply to the entire
cycle from manufacturing, testing
and placing concrete.
Furthermore, the country has ad-
opted European standard EN1992 as
the basis for our new standards and
the team is currentlymodifying exist-
ing standards accordingly.
Highly acclaimed and well re-
spected economist, Dr Roelof Botha,
predicted a number of ups anddowns
in the market last year, of these 90%
were realised.
According to Botha South Africa’s
mortgages are still low and the econ-
omy in general is under performing.
He says that low commodity prices
are due to swing as they follow cycli-
cal movements and have done so
throughout history. Despite chal-
lenges, the South African economy
still continues to grow modestly and
when commodity prices do improve
he predicts that our economy is going
to flourish. Added to that, he says
that indicators are pointing that the
Readymix vs Bagged for housing boom
The readymix concrete industry supplies 15%of concrete used
in South Africa as opposed to similar-sizedmarkets around the
world - where readymix comprises up to 75% of the concrete
used in these countries.
country’s property market is on-the-
brink of the next property boom and
that signs are already showing that
the boom has started. Those able to
invest in property or improvements
may consider his 90% track record
when contemplating their next in-
vestment.
Andre de Klerk of Eskom told del-
egates at the SARMA conference that
load shedding will remain a reality
for the next two and a half years. He
said that the country has the ability to
generate approximately 40 Gigawatts
(GW) of electricity but loses 4GW for
planned maintenance and a further
4GW for unplanned maintenance,
which means that the nett output is
32GW of useable power.
“Best practice dictates that a fur-
ther 15%be held available in reserve.
Unfortunately for us the peak in sum-
mer is 33GWand 35GW inwinter. This
has resulted in our systems becoming
overloaded and as a result, load shed-
ding is being implemented in order to
alleviate pressure off the grid. With
no new projects able to generate
electricity in the short term, Eskom
needs to wait for Medupi and Khusile
to come on line before there is a shift
away from load shedding.”
■
Cement & Concrete