Increased infrastructural spending by the government, numerous planned projects by public corporations, low-cost housing projects and the revival of residential building construction will spur the demand for cement, consultancy Frost and Sullivan said on Thursday.
The total demand for cement in South Africa was 14.9 million tons in 2008, it said in a statement on Thursday.
It estimated that this would reach 23.1 million tons in 2015.
Its research covered the market segments mining, civil construction, independent blenders, concrete product manufacturers, ready-mix producers, and building construction.
Frost and Sullivan industry analyst Litiya Matakala said the residential building construction sector was the largest user of cement in South Africa, accounting for approximately 50 per cent of consumption each year.
"The development of low-cost housing over the period 2010 to 2015 is expected to be the single largest demand driver for the cement industry in South Africa," she said.
The government planned to deliver an estimated 630,000 housing units a year between 2010 and 2015, assuring cement suppliers a high and steady demand for cement.
However, Matakala said rising energy costs were a major challenge for South African cement manufacturers.
"Energy costs account for a significant portion of the total costs of producing and distributing cement.
"Hence, the operating margins of cement producers are coming under more pressure, with the costs of diesel, coal, and electricity increasing.
She said the cost of energy was likely to remain a key challenge for cement producers over the period 2010 to 2015 due to the planned electricity tariff hikes by state power producer Eskom, and the spiralling cost and demand for steam coal, as the global economy recovered from the downturn. - Sapa
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