Concrete product manufacturers (CPMs) in South Africa are facing a tightening margin squeeze, with rising input and transport costs set to place further pressure on already constrained operations.
According to construction materials supplier AfriSam, this environment is forcing manufacturers to re-evaluate how they manage production efficiency, quality control and risk.
While the construction sector has shown early signs of recovery, many CPMs have yet to benefit from increased infrastructure spend. Instead, AfriSam says, their exposure to smaller, interest rate-sensitive projects leaves them vulnerable to market fluctuations.
At the same time, higher fuel prices are driving up transport costs, further eroding profitability.
“Our CPM customers generally operate on very thin margins and their position looks likely to get more difficult. This means there is less room for disruption, breakage or errors in their process and a greater need for continuous monitoring and quality control,” says AfriSam Centre for Product Excellence manager Mike McDonald.
