https://www.engineeringnews.co.za

Local plastics industry globalising, despite challenges

PLASTICS INDUSTRY There is pressure to reduce import tariffs and product lines throughout the industry

PLASTICS INDUSTRY There is pressure to reduce import tariffs and product lines throughout the industry

17th January 2014

By: Anine Kilian

Contributing Editor Online

  

Font size: - +

The South African plastics industry is increasingly becoming part of the global market, states local plastics industry body Plastics South Africa (SA) executive director Anton Hanekom, adding that more trade agreements are taking place, making the import and export of plastics easier.

He points out that the industry was affected by the 2008 economic downturn and started to decline in 2009.

“However, we have experienced soft growth since 2009 and we expect this growth to continue into 2014,” he says.

Hanekom notes that one of the major challenges the industry faces is cheap imports.

“Since 1994, we have been part of the World Trade Organisation and have signed several trade agreements. We have noticed the pressure to reduce import tariffs and product lines, as well as more aggressive local competition through cheap imports,” he states.

He points out that the bulk of cheap imports come from the East and, considering import statistics, the volume and tonnage mainly come from China.

“We are working with the Department of Trade and Industry and are considering preferential procurement and a focus on local manufacturing, as well as protecting and supporting the industry,” Hanekom notes.

He adds that the local manufacturing base has eroded over the last few years and there is a lot of discussion on preferential procurement.

“Part of the difficulty is that not many plastic products – for example, plastic bags or pens – are procured by government and plastic is often a second-tier material.

“For example, government will tender for HIV/Aids test kits, where the bulk of the kits are made from plastic, but that does not get specified in procurement pricing,” he explains.

Hanekom states that Plastics SA is talking to the South African Revenue Service (Sars) regarding customs and border posts and is also looking at reference pricing with Sars’ assistance, which entails taking the raw materials and waste of products into account.

“It is a benchmark for imported products coming in, so if there is a reference price below that price, it can be stopped and investigated,” he says.

Hanekom adds that several studies are analysing the ways in which China can export products at such low prices and how these products can be delivered and imported at cheaper costs than at the costs of manufacturing products locally.


“We are also involved in assessing the import tariff and ensuring that it is correct. We found that there are codes that are very broad, so it is difficult to measure, monitor and evaluate them,” he says, adding that there is an attempt to unpack those tariff codes to make them more measurable, which will give the industry more information that can guide it in this process.

“The cost of electricity is another chal- lenge, as plastics is subjected to a heat- based thermal process that uses a lot of electricity. The industry is affected not only by State-owned power utility Eskom’s tariff increases but also by municipality increases, which have increased substan- tially,” Hanekom notes.

He adds that compliance costs, which are costs incurred in complying with local legislation, are another challenge the industry faces.

“A part of the challenges we face is the education of consumers. We focus on the sustainability and negative perceptions regarding plastics. A lot of what we do revolves around educating consumers, retailers, government municipalities and brand owners about recycling,” he says.

Hanekom states that increasing labour costs is a major challenge, as these costs are linked to the unrest in the labour force and the perception that it creates internationally, which has subsequently created another challenge regarding investment for the industry.

Technological Advancements

The main technological advancements revolve around energy efficiency, using full electrical machines instead of hydraulics, Hanekom states.

“There are also many new developments in the recycling process and there are constant changes to the formulation of manufacturing plastics materials, as new plastics materials are constantly being created and developed and different grades of plastics are being manufactured,” he explains.

He notes that plastics is a fairly new material and is undergoing much growth and development and is still seeing a large amount of growth.

Hanekom adds that Plastics SA is also embarking on a Zero Plastics waste-to-landfill initiative.

“A bottleneck that we need to address is separation at source recycling. That includes households that separate all recyclable material,” he says.

Hanekom notes that the biggest poten- tial for growth lies in packaging, as it currently comprises 55% of all polymers being converted in South Africa.

“Compared with Europe, whose converted polymers comprise 38%, South Africa’s is substantially bigger,” he concludes.

Edited by Megan van Wyngaardt
Creamer Media Contributing Editor Online

Comments

Showroom

SABAT
SABAT

From batteries for boats and jet skis, to batteries for cars and quad bikes, SABAT Batteries has positioned itself as the lifestyle battery of...

VISIT SHOWROOM 
Werner South Africa Pumps & Equipment (PTY) LTD
Werner South Africa Pumps & Equipment (PTY) LTD

For over 30 years, Werner South Africa Pumps & Equipment (PTY) LTD has been designing, manufacturing, supplying and maintaining specialist...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.255 0.321s - 271pq - 2rq
Subscribe Now