South Africa’s new political leadership has brought new optimism to the South African construction industry - but the wounds of excess capacity still fester, says Norman Seymore, CEO of the Chryso South Africa Group and vice-president of Chryso globally. Chryso SA is the parent company of a.b.e. Construction Chemicals.
Chryso SA Group chief, Norman Seymore, says there is now ‘cautious optimism’ in the construction sector – but also ominous levels of competition.
Seymore says although Pres Cyril Ramaphosa has only recently taken over the reins politically - and the land expropriation issue could still pose challenges for the ANC government - the local construction industry now seems to have a sense of “cautious optimism” about its future.
“There is the expectation that long-delayed infrastructural projects – which were budgeted for many years ago – could finally be released to provide more work in the building and ancillary sectors. Chryso is, in fact, already seeing an upsurge in building activity with increasing demand for our products particularly in the Western Cape where water conservation will spawn several urgent and major building projects, for renewable energy projects in the Eastern Cape, and for upgrading of the Transkei infrastructure, to name just three examples. The industry is now also more confident that the long-term promise contained in the National Development Plan will now gradually be fulfilled.”
But Seymore says the damage done by the cement industry’s excess capacity is by no means over, particularly in the ready mix concrete sector which is currently facing very difficult trading conditions. “Excess capacity and depressed trading conditions have swept ready mix producers into a ‘price war’ caused by the proliferation of players in the market and the fact that users of ready mix are operating in a do-or-die market where pricing rules. Adverse operating conditions in the ready mix sector impact negatively on Chryso as the industry is an important market for our Group’s products.”
Facing such difficult local conditions coupled with the weakening of the rand, Seymore feels Chryso’s decision to seek new markets elsewhere in Africa has been fully justified and - to expand the Group’s export drive even faster - he has personally taken over responsibility for driving exports to sub-Saharan Africa. New Chryso/a.b.e. distributors have been appointed in Botswana and Mozambique with more to follow in other African countries such as Angola, the DRC, Tanzania and Uganda. Chryso established its own East African operations based in Nairobi two years ago.
“Chryso’s other priority for future growth is new products and here the Group intends widening its offerings in decorative concrete, structural fibres, waterproofing, environmentally-friendly dust suppressant products, and our product range for the mining sector.”
The opening of Chryso’s Centre of Excellence testing laboratory and research facilities at the Group’s local head office in Jet Park has also paid dividends. The new Centre features ultra-modern testing equipment and temperature control systems to offer cement, concrete and construction technology as an added-value service to customers. “The Centre provides tailor-made solutions to match specific applications and customer requirements and recommends suitable additives and dosages to boost concrete mix performance and contain costs. The new facility – which complements the work done by accredited testing laboratories – is the biggest of its kind in the local admixture market. Customer support has been overwhelming,” Seymore adds.