Seifsa gauges impact of oxygen shortage on members' operations

4th February 2021 By: Marleny Arnoldi - Creamer Media Online Writer

To assess the scale of the reported oxygen shortage in South Africa, the Steel and Engineering Federation of Southern Africa (Seifsa) took it upon itself to survey its member companies to establish their experiences around oxygen shortage within the metals and engineering sector.

Seifsa set out to understand the impact of the shortage on their production levels and whether alternative measures were being sought regarding input supply chains.

This follows news reports in recent weeks of a high demand for medical oxygen, which is putting immense pressure on oxygen suppliers and affecting industrial supply.

According to the survey results, which were sent to all 1 600 member companies, 76.92% of the respondents said they had experienced oxygen shortages and had considered alternative supplies in the process.

Several companies whose analytical instruments use oxygen had to alter their inspection regularly to reduce consumption and find alternative supply, in one case at a cost of R4 000 per bottle, compared with the standard cost of R140 per bottle.

Some of the respondents mentioned that they were at risk of running out of oxygen within 14 days.

Others said the impact had been so severe that they had to apply for extensions on their projects or stop production altogether.

“Based on the views of the respondents, Seifsa believes the oxygen shortage has indeed disrupted industrial production. However, we concur with our respondents who believe that lives need to be saved, hence the supply of medical oxygen should be prioritised,” says Seifsa chief economist Chifipa Mhango.

He adds, however, that the Seifsa survey indicates that the issue of oxygen supply remains a concern as the Covid-19 pandemic persists.

Mhango elaborates that it is clear that the second wave had placed a strain on sectors heavily reliant on oxygen as a result of the high rate of daily hospital admissions. Going forward, Mhango believes that strategic interventions and engagements will be required with oxygen suppliers to salvage the crisis.

“However, with the Covid-19 vaccine roll-out soon to be implemented in the country and a managed approach by government to reduce infections, we expect a return to normality in oxygen supplies in the coming weeks and months as hospitalisation rates decline,” he concludes.

Engineering News reported last month that oxygen suppliers had adequate reserves of oxygen in storage, but that logistical challenges were negatively impacting on supply to customers.