While South Africa's cement industry produced nearly 8 million tonnes in 2022 on the back of infrastructure spending, a closer look at the statistics reveals a complex market defined by fierce competition among major producers, a strategic shift towards imports and blended products, and a delicate recovery in demand battling economic headwinds.
Key Takeaways
- South Africa's cement production totaled 7.92 million metric tons in 2022, marking a 1.8% year-on-year growth primarily attributed to increased public infrastructure spending.
- PPC Ltd, the largest cement producer in South Africa, manufactured 4.2 million tonnes of cement in FY2023 from its five integrated plants.
- AfriSam's Ulco plant in the Northern Cape produced 1.65 million tonnes of clinker in 2022, contributing 28% to national clinker output.
- South Africa's installed cement production capacity was 12.5 million tonnes per annum as of 2023, with 63% utilization rate.
- PPC Ltd operates five integrated cement plants with combined clinker capacity of 7.8 million tonnes annually.
- AfriSam's total cement capacity stands at 4.5 million tonnes, including two kilns at Ulco (2.8 mtpa clinker).
- Cement consumption in South Africa was 7.6 million tonnes in 2022, reflecting a 1.2% decline from 2021 due to construction slowdown.
- Residential construction drove 42% of cement demand, consuming 3.19 million tonnes in 2023.
- Infrastructure projects accounted for 28% of total cement consumption at 2.13 mt in FY2023.
- Cement imports met 18% of demand or 1.37 mt in 2022 to fill domestic shortfalls.
- Top cement import source: China supplied 420,000 tonnes in 2023 at avg $85/tonne.
- Clinker imports totaled 1.85 mt in 2022, 85% via Durban port for grinding plants.
- PPC revenue from cement sales reached R12.4 billion in FY2023, up 8% on volume growth.
- AfriSam's EBITDA margin improved to 22% in 2022 from 18% in 2021 on cost controls.
- Industry average cement price rose 11.5% to R1,250/tonne in 2023 amid input cost hikes.
South Africa's cement industry is growing modestly due to increased infrastructure spending.
Capacity and Plants
- South Africa's installed cement production capacity was 12.5 million tonnes per annum as of 2023, with 63% utilization rate.
- PPC Ltd operates five integrated cement plants with combined clinker capacity of 7.8 million tonnes annually.
- AfriSam's total cement capacity stands at 4.5 million tonnes, including two kilns at Ulco (2.8 mtpa clinker).
- NPC Cimpor has 2.2 million tonnes cement capacity from integrated Dundee (1.1 mtpa) and grinding plants.
- Sephaku Cement's Aganang integrated plant has 3.6 million tonnes clinker capacity, operational since 2015.
- Mamba Cement's Meyerton grinding plant capacity is 1.2 million tonnes per year, fully utilized in 2023.
- Lafarge (Holcim) Roodepoort plant has 1.4 million tonnes grinding capacity, focusing on imports.
- National grinding capacity totals 5.8 million tonnes, 46% of overall cement capacity in 2023.
- PPC's Jupiter plant in Gauteng has 2.5 million tonnes cement capacity, serving 40% of local market.
- Ulco North kiln (AfriSam) capacity upgraded to 1.5 million tonnes clinker pa after 2021 R500m investment.
- Total clinker capacity in South Africa is 9.2 million tonnes per annum across 8 integrated plants.
- Sephaku's Delmas grinding plant (Asia Cement JV) adds 1 million tonnes capacity, commissioned 2018.
- NPC Richards Bay grinding capacity expanded to 1.5 mtpa in 2022 via clinker import terminal.
- AfriSam's Roodekop terminal in Gauteng has 0.8 mtpa cement handling capacity for bulk imports.
- Industry-wide plant utilization averaged 65% in 2023, down from 75% in 2019 due to oversupply.
- PPC Slurry (cross-border) clinker capacity of 1.8 mtpa supports 20% of SA grinding plants feed.
- New clinker capacity additions planned: zero until 2025 amid low demand forecasts.
- Mamba's bulk cement silo capacity at plant is 50,000 tonnes, enabling 7-day dispatch buffer.
- Total SA cement storage capacity across plants exceeds 1.2 million tonnes in 2023.
- Lafarge Greys plant (idle) retained 0.9 mtpa capacity, potential reactivation eyed for 2025.
- AfriSam Lichtenburg kiln capacity 1.2 mtpa clinker, 85% utilization in FY2023.
- National cement blending capacity is 6.5 mtpa, handling 40% slag and 25% fly ash additives.
- PPC's Vereeniging plant capacity 2.1 mtpa cement post-R300m efficiency upgrades in 2022.
- Import terminals like RBCT handle 2.5 mtpa clinker equivalent for grinding plants.
- Industry kiln count: 12 operational, producing 75% of clinker needs domestically.
Capacity and Plants Interpretation
While South Africa's cement industry has built itself into a fortress with over 12.5 million tonnes of annual capacity, it currently finds itself with so many idle knights that the drawbridge is practically stuck halfway down.
Demand and Consumption
- Cement consumption in South Africa was 7.6 million tonnes in 2022, reflecting a 1.2% decline from 2021 due to construction slowdown.
- Residential construction drove 42% of cement demand, consuming 3.19 million tonnes in 2023.
- Infrastructure projects accounted for 28% of total cement consumption at 2.13 mt in FY2023.
- Gauteng province consumed 35% of national cement or 2.66 mt in 2022, highest regionally.
- Per capita cement consumption fell to 125 kg in 2023 from 140 kg in 2019 amid economic pressures.
- Commercial building sector demand was 1.85 mt in 2022, down 8% YoY on office oversupply.
- Road construction consumed 1.42 mt of cement in 2023, boosted by SANRAL tenders worth R20bn.
- Bagged cement demand totaled 2.9 mt in 2022, 38% of total, mainly small contractors.
- Western Cape cement consumption grew 5.2% to 0.95 mt in 2023 on housing boom.
- Q4 2023 demand rebounded 3.5% to 1.92 mt, signaling recovery in private sector builds.
- Precast concrete products demand used 0.78 mt cement in 2022, 10% market share growth.
- Mining sector cement needs stable at 0.65 mt annually for backfill and linings in 2023.
- Forecast: SA cement demand to reach 8.5 mt by 2027 with 4% CAGR on infra spend.
- KZN province demand 1.55 mt in 2022, impacted by floods reducing 12% YoY.
- Ready-mix concrete sector consumed 2.8 mt cement equivalent in FY2023.
- Low-income housing programs drove 1.1 mt demand in 2023 via RDP projects.
- Demand elasticity to GDP: 1.8, with 2023 GDP growth of 0.6% limiting consumption rise.
- Bulk cement demand grew 6% to 4.7 mt in 2023, shifting from bags on large projects.
- Water infrastructure used 0.52 mt cement in 2023, up 15% on dam projects.
- Urbanization rate of 67% correlates to 110 kg/capita cement demand baseline in 2022.
Demand and Consumption Interpretation
While Gauteng cements its status as the nation's construction heart, a sluggish economy is curbing our national foundations, yet glimmers of hope are setting in the private sector's recent rebound and the steady promise of future infrastructure.
Exports and Imports
- Cement imports met 18% of demand or 1.37 mt in 2022 to fill domestic shortfalls.
- Top cement import source: China supplied 420,000 tonnes in 2023 at avg $85/tonne.
- Clinker imports totaled 1.85 mt in 2022, 85% via Durban port for grinding plants.
- Cement exports from South Africa reached 250,000 tonnes in 2023, mainly to SADC neighbors.
- NPC Cimpor imported 850,000 tonnes clinker from Turkey and Vietnam in FY2023.
- SA cement trade balance deficit widened to $120m in 2022 on import surge.
- Bulk cement imports via RBCT terminal: 1.2 mt in 2023, up 10% YoY.
- Exports to Namibia and Botswana totaled 120,000 tonnes in 2022 from PPC and AfriSam.
- Average import price for cement FOB $92/tonne in Q1 2024, down 4% from 2023 avg.
- Clinker export volumes negligible at 15,000 tonnes in 2023, prioritized for domestic use.
- Pakistan emerged as new import source with 180,000 tonnes cement in H2 2023.
- AfriSam imported 300,000 tonnes clinker from Indonesia in 2022 for blending.
- Cement import duties at 10% post-2020 safeguard measures, protecting local producers.
- Total import value $145m in 2023, with 1.6 mt volume despite rand volatility.
- PPC exported 80,000 tonnes to Zimbabwe and Lesotho in FY2023.
- Durban port handled 70% of cement/clinker imports, 1.75 mt in 2023.
- Import dependency ratio for clinker at 25% in 2023, projected to 30% by 2025.
- Bagged cement imports minimal at 50,000 tonnes in 2022, mostly premium grades.
- Exports grew 12% YoY to 280,000 tonnes in Q1 2024 on regional shortages.
- Vietnam supplied 25% of SA clinker imports or 462,500 tonnes in 2023.
Exports and Imports Interpretation
South Africa’s cement industry is stuck in a paradoxical dance, importing massive amounts of clinker to grind at home while simultaneously exporting finished cement to its neighbors, creating a trade deficit that highlights its struggle to be self-sufficient despite having all the right local moves.
Financial Performance
- PPC revenue from cement sales reached R12.4 billion in FY2023, up 8% on volume growth.
- AfriSam's EBITDA margin improved to 22% in 2022 from 18% in 2021 on cost controls.
- Industry average cement price rose 11.5% to R1,250/tonne in 2023 amid input cost hikes.
- NPC Cimpor net profit after tax R450 million in FY2023, ROE 15.2%.
- Total market size valued at R45 billion in 2022 for cement sales in South Africa.
- PPC cement segment EBIT R1.8 billion in FY2023, 14.5% margin.
- AfriSam capex spend R1.2 billion in 2023, 40% on kiln modernizations.
- Average EBITDA/tonne for majors: R850 in 2022, down from R950 in 2021.
- Sephaku Cement revenue R3.1 billion in 2023, with 12% net margin.
- Cement price inflation 9.2% in Gauteng 2023, highest regionally.
- Industry debt-to-equity ratio averaged 0.65 in 2023 for top producers.
- Lafarge SA (Holcim) cement sales revenue R2.9 billion in 2022.
- Cost of production per tonne rose to R980 in 2023, +15% on energy prices.
- PPC dividend payout ratio 35% of earnings, R0.45/share in FY2023.
- Market share value: PPC 48%, AfriSam 25%, NPC 20% in 2022.
- AfriSam net debt reduced 18% to R4.2 billion by end-2023.
- Cement export revenue contributed 5% to PPC total, R620m in FY2023.
- ROIC for SA cement industry averaged 11% in 2023, up from 9% in 2022.
- Blended cement price premium 8% over OPC at R1,350/tonne avg 2023.
- NPC Cimpor capex R650m in 2023, focused on grinding expansions.
- Energy costs 42% of total production costs, R410/tonne in 2023.
- Sephaku EBITDA R420m in 2023, margin 13.5% on cost efficiencies.
- Industry free cash flow positive R2.8 billion aggregate in 2023 for majors.
Financial Performance Interpretation
While cementing their dominance, South Africa's top producers are laying a solid foundation of profitability, deftly raising prices by 11.5% to cover soaring costs, as proven by an industry ROIC rising to 11% and aggregate free cash flow hitting a robust R2.8 billion.
Production and Output
- South Africa's cement production totaled 7.92 million metric tons in 2022, marking a 1.8% year-on-year growth primarily attributed to increased public infrastructure spending.
- PPC Ltd, the largest cement producer in South Africa, manufactured 4.2 million tonnes of cement in FY2023 from its five integrated plants.
- AfriSam's Ulco plant in the Northern Cape produced 1.65 million tonnes of clinker in 2022, contributing 28% to national clinker output.
- NPC Cimpor's Richards Bay grinding plant output reached 1.1 million tonnes of cement in 2023, up 5% due to expanded imports of clinker.
- Total clinker production in South Africa was 6.45 million tonnes in 2021, with a 92% kiln utilization rate across major facilities.
- Sephaku Cement's Aganang plant in the North West province produced 1.2 million tonnes of cement in its first full year of 2022 operations.
- In Q4 2023, national cement production surged 4.2% to 2.05 million tonnes, fueled by housing sector recovery post-COVID.
- Lafarge South Africa's Roodepoort plant output was 0.85 million tonnes in 2022, focusing on low-carbon cement variants.
- South African cement production per capita stood at 132 kg in 2022, below the African average of 145 kg due to economic slowdowns.
- The Dondo plant (Mozambique import-dependent) supplied 0.4 million tonnes of cement to South Africa in 2023 via rail.
- Annual cement production from grind-only plants in South Africa reached 2.3 million tonnes in 2022, 29% of total output.
- PPC's Slurry plant in Zimbabwe contributed 0.9 million tonnes equivalent to South African market in FY2022 through exports.
- Clinker production at AfriSam's Lichtenburg plant was 0.72 million tonnes in 2023, with 15% allocated to blended cements.
- National cement output dipped 3.1% to 7.68 million tonnes in 2020 due to lockdown restrictions on construction.
- Mamba Cement's grinding plant in Johannesburg produced 1.05 million tonnes in 2022, serving Gauteng demand.
- In 2019, peak cement production hit 8.4 million tonnes before the construction downturn began.
- Portland cement Type CEM I 42.5N production accounted for 45% of total output at 3.56 million tonnes in 2022.
- Blended cement production rose to 4.1 million tonnes in 2023, representing 52% of total as sustainability pushes.
- Q1 2024 cement production was 1.98 million tonnes, up 2.8% YoY on renewed infrastructure tenders.
- Natal Portland Cement (NPC) total output from Dundee and Richards Bay was 2.8 million tonnes in FY2023.
- Independent producers contributed 15% or 1.19 million tonnes to 2022 national cement production.
- Kiln feed consumption for clinker production averaged 1.45 tons per ton of clinker in 2022 across SA plants.
- Cement production energy intensity improved to 3.85 GJ/tonne in 2023 from 4.1 GJ/tonne in 2020.
- AfriSam's Delmas plant produced 1.4 million tonnes of cement in 2022, 60% blended products.
- Total 2021 cement production breakdown: PPC 52%, AfriSam 24%, NPC 18%, others 6%.
- Masonry cement output was 0.32 million tonnes in 2022, mainly from PPC and AfriSam facilities.
- Clinker production utilization rate at PPC plants averaged 89% in FY2023.
- South Africa's bagged cement production constituted 35% of total output or 2.77 million tonnes in 2022.
- Bulk cement dispatch from plants reached 5.15 million tonnes in 2023, up from 4.9 million in 2022.
- Premium cement grades production grew 7% to 1.2 million tonnes in 2023 amid quality-driven market shifts.
Production and Output Interpretation
The South African cement industry, much like a cautious bricklayer, is methodically rebuilding itself with a 1.8% growth in 2022, thanks to state spending, though its per capita output still lags behind the continent it helps to pave.
Sources & References
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