Leading black-women-owned investment and operating company WIPHOLD and Tangshan Jidong Cement Company have signed an agreement to import high-quality (SABS - and ISO9001 - approved) cement into South Africa from China .
The agreement will see WIPHOLD acting as Jidong’s sole distributor in South Africa . Opportunities for the African continent will also be explored by both parties.
WIPHOLD has been actively looking for opportunities to extend its operational involvement outside the financial services sector. The first of such ventures – this trading partnership with Jidong – was formed following a recent visit to China with President Thabo Mbeki and leading business delegates.
“We’re very pleased to enter this strategic partnership with Jidong,” said WIPHOLD CEO Louisa Mojela . “ South Africa has many impediments to growth, including shortages in cement supply to support infrastructure development. We believe this joint venture – a trading partnership at first – will go far to help satisfy the demand until local cement producers address capacity issues.”
In a study prepared for the Presidency by SUDEO International Business Consultants, the capacity of the four major local cement producers was approximately 14.8 million tons in 2006. With construction under way, the producers expect to increase local supply to 21.4 million tons per year in 2011.
Jidong produces some 25 million tons a year, more than that of South Africa ’s local producers combined.
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.
Mojela said the partners were in agreement that the cement they’ll be bringing into South Africa will be priced competitively. Further, it is likely that buying from the WIPHOLD/Jidong joint venture will confer BEE procurement credits.
Deputy Chairman Yu from Jidong said, “Jidong is one of China ’s leading cement manufacturers. We have delivered over 70 million tons of cement towards the economic development of China and have reached sufficient scale to export.
“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.”
Jidong will ship bagged cement from China to Durban harbour where it will be offloaded onto docking stations for collection by WIPHOLD’s customers.
The operation will be run out of WIPHOLD’s Johannesburg office using existing capacity at the outset.
“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. WIPHOLD and Jidong are excited by the prospects of this venture and believe we can make a meaningful contribution to the construction sector in South Africa ,” concluded Wipcapital CEO Gloria Serobe.
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