KHAYA SITHOLE: Localisation plan could merely cement lower quality and higher prices
While PPC and Sephaku Cement might be smiling, the strategy lacks solid data
A few weeks ago the National Treasury injected life into the share prices of PPC and Sephaku Cement through a directive indicating that the government would now procure cement exclusively from SA companies. This was seen by many as a positive sign that the government would now actively participate in promoting localisation.
However, a few key questions remained unanswered. The first is what effect such a directive would have on the companies in the cement sector. If the state had a confirmed pipeline of projects that would use large volumes of cement in the medium term, then the value of the directive would be easy to crystallise...