Building industry 'will recover in 2010'

Don Robertson

Don Robertson

Major construction groups and material suppliers to the building industry predict a tough year, but they believe that 2010 will see a big recovery in the industry.

Corobrik, a major supplier of bricks and mortar, also think that from next year, market conditions will improve dramatically.

"Trading conditions will be tight for the rest of this year, but everything is looking good for 2010," said Dirk Meyer, managing director of the 108-year-old Corobrik group.

"Since taking office, economic conditions have not supported a growth strategy, mainly due to the contraction in the residential markets where electricity constraints, the National Credit Act and high interest rates have curtailed developments. These factors have effectively reduced the middle to upper end of the residential housing market."

But the low-income housing market was performing well and the group was focussing on this sector.

Meyer said theyhad the flexibility to switch their marketing emphasis from the residential to low-income houses and infrastructural developments such as schools, hospitals and prisons.

Corobrik, has become the first South African company to be awarded carbon credits by the UN Clean Development Mechanism as agreed to by the Kyoto Protocol. Its Lawley factory near Lenasia switched to natural gas from coal firing in 2004. Under the Kyoto Protocol, developed countries can achieve their emission reductions by buying carbon credits from developing nations such as South Africa, India, China and Brazil.

The Driefontein factory near Carletonville has also successfully converted to natural gas.

New technology using an extrusion technique has also been introduced to a number of factories, which results in lighter bricks being produced. This allows for more bricks to be loaded on trucks, requires less mortar for building and allows bricklayers to lay more each day.

Following the recent establishment of an employee share trust, employees now have a 26percent share in the group. Together with an allocation to other previously disadvantaged communities, including AKA Capital, chaired by Reuel Khoza, it takes black empowerment to 53percent of Corobrik, said Meyer.