Housing in Southern Africa October-November 2016

Industry Buzz

PipesX Conference

S APPMA Chief Executive Officer, Jan Venter, “The plastic pipe industry is arguably one of the most important industries in South Africa’s infrastructure as water dis- tribution, waste disposal, irrigation, telecommunications and amyriad of other services rely on pipe infrastruc- tures to work effectively. SAPPMA has proven that we are heavily invested in the well-being of the local plastics pipe industry – es- pecially where standards and tech- nical specifications are concerned. We have already exposed more than 1 500 delegates to close to 200 techni- cal papers since the first conference. This year 17 experts shared their ex- pertisewith delegates fromAustralia, Spain, Germany and theMiddle East,” said Venter. T he Competition Commission has prohibited an intermediate merger between Much Asphalt acquiring five fixed asphalt plants – Roadspan Plants from Roadspan Surfaces. Following themerger, Much Asphalt will wholly own the Roadspan Plants. The Commission found that the proposed merger is likely to sub- stantially prevent or lessen competi- tion in the markets for the supply of asphalt products. Much Asphalt manufactures and supplies hot and cold mix asphalt products to the commercial sector. It also supplies asphalt products for use or application on urban streets, freeways, runways, race tracks, pub- lic sidewalks, bus lanes and certain harbour specific applications. The company is currently only active in themanufacture of asphalt and does

The SouthernAfricanPlastic PipeManufacturers Association (SAPPMA) recently hosted the PIPES X Conference at the Byte Conference Centre in Midrand.

approximately 40 000 km of plastic pipe is manufactured annually in South Africa, we are doing everything to prevent a general deterioration of plastic piping systems in our country. SAPPMA has been at the forefront of this situation and is probably furthers down the road to facilitate alternative mechanisms.” Venter concludes, “There aremany exciting, new markets and opportu- nities emerging for the plastic pipe industry. We have an ever-increasing role to play. We need to make sure that we are part of the solution – not part of the problem.” ■ pose any remedies to address the Commission’s concerns nor have they advanced any cogent efficien- cies, procompetitive gains or public interest benefits that could outweigh the competition concerns. The Com- mission has prohibited the proposed merger. “Asphalt is one of the critical products in infrastructure develop- ment projects, particularly road construction. The merger would have created a market structure in the supply of asphalt that is highly concentrated, leaving the merged entity the dominant supplier in key geographic locations in South Africa. Ultimately, customers of asphalt in road construction would have had to bear the high prices had the merger been approved,” says Acting Deputy Commissioner, Hardin Ratshisusu. ■

Keynote speakers included Corné Krige, former Springbok rugby cap- tain who led the team to the World Cup in 2003 – who shared some life lessons on effective leadership in sport and business, this was followed by Ralph Triebel of LHA Management Consultants, who gave an overviewof the trends in the local pipe market. Many of the papers presented reflected the problems facing the industry such as the accreditation of national standards. Venter explains, “Quality in general and long-term product quality, in particular, is one of our cornerstones. Considering that not offer services. The five fixed Road- span Plants located in Kimberley, Stilfontein, Welkom, Nelspruit and Daben produce hot and limited cold mix asphalt. The Commission found that the merged entity will hold a dominant position in each of the affected markets as a result of the proposed merger, and will not face strong competition in these markets. The Commission also found that it is not easy for new firms to enter and compete effectively in the affected markets because of capital, regula- tory and economies of scale require- ments. Furthermore, customers of the merging parties do not have the ability to negotiate for lowers prices as there are few alternative suppliers of asphalt products. The merging parties did not pro-

Commission prohibits asphalt merger

October/November 2016