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Wiphold to import cheap cement from China

Chinese company may build plant in SA.

Women Investment Portfolio Holdings (Wiphold) has partnered with Shenzhen-listed Tangshang Jidong Cement to import cement from China.

Wiphold will be the sole distributor of Jidong’s branded cement called Dunshi. Jidong is 52% owned by the state and is the largest manufacturer and provider of cement in northern China where it sells a ton of cement for $40 compared to the market price of $120 in some parts of the world.

Gloria Serobe, executive director at Wiphold, would not say how much the investment company would be selling cement for in SA, but said that the company’s pricing structure would be very competitive.

But, Chinese imports in the clothing and textile industry have caused large-scale job losses. Local factories have been forced to scale back because they could not compete with the cheap prices offered by their Asian counterparts. Serobe said that this would not be an issue in the construction industry as there was a shortage in cement.

“We still have a long way to go before we’ll have a situation where the factories will close down. Instead what’s happening now is that people are closing down their business because there’s a shortage in cement,” she said.

Asked about quality assurance and labour practices in China, Serobe said that they were confident that Jidong met the relevant criteria.

Serobe said that Wiphold has been looking for opportunities to extend its operational involvement outside the financial services sector. She said that the company had developed a new portfolio where it will house its infrastructure assets and that this trading partnership with Jidong is their first asset.

Wiphold has shareholdings in Old Mutual, Nedbank, Mutual and Federal, Futuregrowth and Legae Securities in the financial services sector, as well as shareholdings in Telkom, Distell, Afrisun Leisure, Adcorp and others.

Jiuzhou Yu, deputy chairman of Jidong said that if the agreement with Wiphold is a success, the company would build a cement plant in South Africa.

“Our Dunshi brand cement is currently delivered to Southeast Asia, America and Nigeria. We look forward to Wiphold expanding our markets and believe there is much opportunity in South Africa and on the African continent,” he said.

According to a study prepared for the Presidency, the capacity of the four major local cement producers was approximately 14,8m tons last year and with the government’s R400bn infrastructure plan underway, producers expect to increase local supply to 21,4m tons by 2011.

Serobe said that Jidong produced 25m tons of cement every year, more than what local companies combined produce, proving that they have the capacity to meet South Africa’s cement challenges.

The plan is to ship bagged cement from China to Durban harbour and have it delivered direct to the customer at docking stations, Serobe said.

“Currently, Lafarge is importing 10% of its total cement volumes, or 600 000 tons a year. Because of such shortages, the local economy has seen price hikes of up to 20% for bagged cement from Lafarge in the past five months and Holcim’s 9,9% increase in January is expected to be followed by another in July,” she said.

“Expanding our operations to support infrastructure development underpins economic growth and will play a part for job creation, a successful 2010 and more broadly for the transformation challenges of South Africa and the continent.”

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COMMENTS   22

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Anyone like me (and yup – I have have driven into a carport wall and watched the damn thing collapse – much to the concealed delight of my pool playing sons and overt delight of my ex’s colleagues) will know that this is NOT good news. Building contractors cheat on the cement/sand mix with the expensive stuff. How much worse is it going to be with cheap imports from China?

Guess I have to STOP using carport walls as brakes – unless of course they’re willing to pay me a fee to do some quality control.

Great to see. Remember people saying that construction costs would carry on spiralling indefinitely because a shortage of building materials, in particular cement? Well it’s nice to see some ECO101W kicking in with new entrants (even if it’s imported) coming into the market to exploit the lack of equilibrium. Remember, super profits are unsustainable in an unprotected market.

cant wait to see how the Chinas handle local labour!

I’ve heard that they’re worse than Swiss policemen, and have a strong work ethic. Work ethic? Whats that?

I thought that WIPHOLD is an investment holding company.

Is there anybody out there who can give me the name of one person at WIPHOLD who knows which end of a shovel to hold when mixing cement?

If these jokers seriously think that they are capable of becoming importers, storage agents, and distributors of a bulk product then I expect they have a very steep learning curve to follow.

All the other operators in the business will be rubbing their hands in glee at the entry of these Babes In The Woods and there are going to be magnums of tears

I am all in favour of this development.

In view of the elections coming up shortly I shall personally intervene in this matter and ask Comrade Gloria to speed up the process.

The A.N.C. is committed to buying 1000 tons of this cement in order to make up to 25 million desk-top garden gnomes complete with hairy face, pipe, and SA flag draped over my chest in Roman Emperor fashion.

This will make very good promotional meterial for my election campaign

given tight shipping markets and the logistics involved in warehousing and distributing a bulk commodity like cement, the economics of this deal will only work with preferential BEE pricing…..paid for by the taxpayer

Cement is easily tested so any failures will be due to incorrect usage / mix by locals rather than inferior product from China. The advantage the Chinese have is that it is easy and cheap to produce cement when you have no labour regulations or environmental laws.

It is very useful that Wang is prepared to work for a handful of rice a day whereas Bongani is not. If the Chinese start production here they will see their @rse – they are not used to recalcitrant,highly unskilled , yet militant labor pool. They will wind up having to price exactly like the local boys plus they will go slowly mental working with Bongani and his unionized mates.

Far easier to put up 5 new plants in China and ship the stuff to the dark continent through a network of BEE partners who can grease the wheels for their handful of silver.

There are a number of independent companies who have already secured relationships like this! In fact cement i already in the country!

Do you know how they got their cement.

Jorge

It’s really good of having cement in low prices, but is it a good quallity of cement also? how is it produced? can anyone tell me?

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