CONCRETE EVIDENCE

The 101 Catalytic Projects initiative, in terms of its Breaking New Ground Housing Policy, is making headway in the concrete products sector, writes Anele Malahla

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Government has launched its 101 Catalytic Projects this year, in terms of its Breaking New Ground Housing Policy, with R90 billion being invested into the project. They are expected to generate 20 000 additional jobs in the construction and ancillary industries. Considering that concrete is used in all aspects of housing development projects (used in the making of roof tiles, bricks, blocks, paving of roads, concrete pipework for stormwater and sewage, road kerb stones and drainage, foundations and concrete in the floor slabs), how is this good news for the concrete products sector?

Walter Ebeling, PMSA MD, welcomes the launch of the 101 Catalytic Projects and says the projects will make a huge difference in communities and the construction sector, as many local jobs will be created, both unskilled and skilled, when doing a project of this size. Much of the housing will be in more rural areas—and this is where jobs are really needed:

Can you tell us what difference will the projects make in communities and the concrete sector?

This will give a massive boost to the concrete products sector on a national level and could assist with the falling demand of cement and help to improve the cement demand where many suppliers have been dropping prices due to lower cement demand. This could stabilise the cement market and create new jobs as well as reduce any imminent retrenchments from the cement manufacturing sector.

How will the new policy impact the construction industry in Local Government?

The job creation in these regions will stimulate the economy both on a national level and regional level. Unlike very large mega project that in more locally based and contains a large percentage of imported components, housing is local and maximizes local material and labour supply.

You have previously alluded that the market is difficult, but that these projects will allay certain concerns. Can you please elaborate on this?

The JSE was recently quoted saying companies in SA are sitting on record cash reserves. A project like this would stimulate companies to invest so that they can earn profits.

What do these projects bring to the market and how will it allay concerns about the economy going forward?

With stagnant growth rates in South Africa, this project will generate a much needed demand side stimulus in the economy, which in turn drives supply from the private sector and new investment into capital equipment. Ultimately new jobs will be created across all sectors.

How are the new catalytic projects different from other existing projects?

The current housing projects are too small and dispersed to make a significant impact. This mega project will stimulate the economy.

Human Settlements Minister, Lindiwe Sisulu, announced that of the 101 projects, 94 are ready for implementation. These projects range across all nine provinces, with a combined value of billions of rands. How will this project contribute to skills development and job creation?

The Minister’s announcement is a tonic for the South African economy. I think the market is difficult at the moment. There is a lot of anxiety about the economy going forward, but substantive government announcements such as this will go a long way to allay such concerns. Construction is a great employment generator of both skilled and unskilled people. This project is no different. Many skilled bricklayers, foreman, painters and the likes will be required and industry together with Government will need to facilitate the training of these young unemployed people who could offer skills and labour to the open market, once trained.

Which sectors, other than the concrete business, aligned with the construction industry, will be benefitting from the new policy?

Sectors that will benefit include the mining industry (the quarrying of materials), the steel sector (for steel related materials), the civil fields and roadworks, the cement industry and manufacturing sectors related to the building trades. The local retail sector will also benefit indirectly, as new jobs are being created will result in money is being injected into the various provinces through the housing project.

How big a concern is government housing currently in the construction industry and what please talk to us about competitiveness in this space?

Housing has become a good portion of many of our customers’ businesses. Rural development has been happening, and it will continue. As the housing market develops, our customers will need to be more competitive, which will drive them towards better manufacturing processes and larger machines in pursuit of reduced costs, so they can remain competitive in a tighter market.

Can you talk to us about the importance of leadership in the construction/concrete industry in the roll-out of the project?

Leadership from Government and industry need to ensure there is no collusion from large contractors which could result in higher than real market related prices. Corruption on contract awarding needs to be monitored. New black businesses need to benefit by being supported in the setting up of new black industrialist companies to supply and manufacture the building materials needed for the projects.

Do you have any final thoughts on this topic?

As the name says, this is a catalytic project which could restart growth in South Africa and generate much needed jobs as well as enable black South Africans to have an opportunity to own a home, which intern helps to develop our nation and drive us forward into sustained growth in South Africa.

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